Facebook has confirmed the acquisition of advertising technology from Microsoft Corp. In a serious move to compete against Google, Facebook will make strategic use of the platform to fine-tune its own ad networks. The discussion took a little more than 3 months to fructify, but the social media giant will now have a much better perspective on the way its content is monetized via multiple techniques.
Why the buy-out?
Interestingly, the acquisition seems to be a classic case of a ‘One man’s Junk, Is another man’s treasure’. Microsoft had bought digital ad agency aQuantive in 2007. After paying a handsome figure of US$ 6.3 Billion, among other assets, Microsoft got Atlas Advertiser Suite, an ad management and measurement platform. Unable to tailor the suite to its own purposes, Microsoft had to ‘write-off’ US$ 6.2 Billion as a ‘Bad Investment’. However, it seems Facebook realized that unlike Microsoft, Atlas Advertiser Suite could be just the thing needed to give it the competitive edge against its ad-rival Google Inc.
Facebook had been drawing some serious flak after its poor performance in its stock market debut. Its biggest loss was the announcement from General Motors, one of its largest clients, that it was pulling the plug on all paid advertising on Facebook’s network. Though it is not immediately clear how much Facebook paid to Microsoft, considering it was a mutually beneficial decision, the price could be very close to the initial buy-out price.
How will the latest acquisition help Facebook?
Though the Atlas’s products are numerous, Facebook will be primarily utilizing the measurement tools for checking ad performance. The acquired company will absorb Facebook’s data to target sponsorships, in-stream ads, and other rich ad formats across the web & not just on the main site.
As we all know Google’s primary source of revenue is advertising, it is currently the highest grosser with 15.4% market share, while Facebook is a close second with 14.4%. Will this acquisition tip the scale?
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