Can the much ambitious acquisition of aQuantive help Microsoft fight Google's domination of Internet advertising better?

On May 18 2007 Microsoft took the company's advertising platform to a new level by acquiring aQuantive an online digital advertising company for $6 bn which is also the Redmond giant's biggest acquisition bid ever. With this acquisition it has raised the hope of a renewed rivalry with Google despite skeptics thinking that it will be difficult for it to dethrone the search engine titan. Nevertheless the acquisition can help the software giant carve out some serious territory in online advertising.

With the acquisition of aQuantive Microsoft can provide the advertising industry with a world-class Internet-wide advertising platform. Earlier the Redmond giant spent millions of dollars but failed to make any serious dent in Google's inexorable march towards Web domination where the latter still rules the online search market with roughly half of the market share. However this billion dollar acquisition may help Microsoft in enhancing relationships with advertisers agencies and media owners/publishers by strengthening its advertising platforms and services. But will it give Microsoft increased abilities in building and supporting `next generation' advertising solutions environments and platforms such as cross-media planning video-on-demand and IPTV (Internet Protocol Television)?

Consolidation is nothing new in the software world and the growing online business is getting smaller day by day. "A competitive move against Google is somewhat unlikely due to antitrust culture size and location. In the end merging isn't as strong a path to success as buying a firm which is higher on the advertising food chain," says Rob Enderle Principal Analyst Enderle Group. Others suggest that though Microsoft is 10 times stronger than Google it has fears of being overtaken by Google. But nothing is impossible in the technological arena. Apart from history repeating itself Enderle says that Microsoft bypassed IBM in terms of global power the same way Google is trying to bypass Microsoft and may do so but—unlike IBM—Microsoft is putting up an impressive defense. Even so it may not be enough.

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