Techcrunch had an earlier article. At $6 Billion or $66.50, an ~85% premium over the previous days selling price that creates a price to earning rating of around 52, many people would consider this to be overpayment. With approximately $26 Billion in the bank that shareholders consistently complain is underutilized, it is more likely insurance to prevent a bidding war and a break up of the deal as apparently happened behind the scenes when Microsoft originally tried to acquire Doubleclick.
With headquarters both in Seattle, these partners likely know each other well from the tightly woven Seattle networking community so there is likely a known cultural fit. It is likely clearly friendly due to this and how quickly it came together so quickly after losing the bidding for 24/7 real media. The major question is can Microsoft quickly integrate and leverage these systems with its’ own, some of which have overlap and the graphical side. The other risk is can Microsoft tie up the critical thought leadership staff in an appealing way that maintains the creative culture? Time will tell.
Much like Google’s acquisition of Doubleclick there are conflicts of interest to be resolved. In Doubleclick’s case they own Performics, a search marketing and optimization firm. The Avenue A | Razorfish division performs a significant search marketing and search optimization function just like Performics. Google has yet to state how they will resolve this. Microsoft could score points by stating a plan to deal with this before Google does.
Aquantive has spent $200 Million in the 2004-2006 acquiring Accipiter, iFRONTIER, Franchise Gator, DNA, Amneisa, e-Crusade, GOTOAST, Neue Digitale, NetConversions, Technology Brokers/Media and SBI.Razorfish. While the impacts of these businesses are not yet fully known, Aquantitive prides itself on buying and integrating emerging businesses. Some of these are creating a media exchange like Right Media recently acquired by Yahoo!. Some of the value of this transaction likely lies hidden in these small business lines.
While the integration risk is not insignificant, Aquantive was one of the last premium players available and Microsoft can certainly afford the premium.