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July 26, 2007

FAM: Microsoft buying advertising exchange network

Posted by Benjamin J. Romano at 12:23 PM

Microsoft Platforms and Services Division President Kevin Johnson just announced another advertising-related acquisition. The company is buying a network of digital advertising networks that Johnson likened to the Nasdaq stock exchange -- a place for buyers and sellers of advertising inventory to do business in a neutral marketplace.

The company is called AdECN. Johnson did not disclose the financial terms of the acquisition.

The acquisition raises some of the same issues around neutrality and conflict of interest that came up when Microsoft announced its purchase of aQuantive, which, Johnson disclosed was a very competitive bid process with two other bidders vying for the prize.

I talked to Andrew Frank, an analyst with Gartner, about the issue of consolidation in the industry at the time of the aQuantive acquisition:

This advertising consolidation raises the specter of conflicts of interest for companies that sell advertising across many Web sites but also own major sites of their own, Frank said.

Advertisers might find a better deal in a less-consolidated system in which they could do business with the best company in each segment of the business, "rather than having to choose 'Do you want the Microsoft solution or the Google solution,' " Frank said. "I think that's a danger not just for Microsoft but for the whole industry."

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Tricia Duryee
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Benjamin J. Romano
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