Saturday, May 19, 2007

Google's Sweet spot at target

Looks like Google won't be no longer a run away winner in online ad space.Microsoft announced a desperate and much needed acquisition of acquantiva Inc.. for $6bn.A premium paid but it can give Microsoft some momentum in this space to give MSN a face lift.Online ad industry saw some notable acquisitions in the last few weeks apart from Microsoft's.

  • Google- Doubleclick for $3.1bn
  • Yahoo- Real Media for$680mn
  • AOL- ADtech for $100mn
  • WPP Group- 24/7 media for $649mn

This suggests Google competitors are no longer ready to let it have fun.These moves can see the battle field becoming level in the coming 1-2 years.In the recent months Google tried to divert Microsoft's attention by releasing Google apps.But at the end of the day we all know that Google makes its fortune by ads.Only ads.In the coming months ads going to appear in every media we consume like music,podcasts,gaming etc..

I guess Microsoft is bit relaxed now and it can give tweaks to its Live services in the coming months.Though MSN has traffic it was not able to generate any significant revenue for Microsoft but the latest move can change that.Microsoft also focusing on mobile advertising space and it recently acquired a french company Screentonic. Microsoft already have 6mn XBOX live users which is also a great opportunity for it.After all Microsoft added yet another revenue source.Online ad industry size going to be $40bn by 2010 which is growing at 20%.So there is lot of room to be optimistic for these players.World wide $1 trn spend on ads every year and the question how effective these ads are going to take center place.

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