Microsoft made headlines end of last week when it announced that it has agreed to acquire advertising exchange platform company AdECN. A relatively young organisation, AdECN, which was founded in 2003 and based in Santa Barbara, is a real-time, auction-based, neutral exchange for buying and selling online display advertising... |
Microsoft made headlines end of last week when it announced that it has agreed to acquire advertising exchange platform company AdECN.
A relatively young organisation, AdECN, which was founded in 2003 and based in Santa Barbara, is a real-time, auction-based, neutral exchange for buying and selling online display advertising.
The exchange concept is similar to the NASDAQ which serves as the hub for financial brokerages, enabling all parties to come together and have access through a neutral party to a larger pool of supply and demand for their clients. Exchanges are a means by which liquidity is created for advertising networks by bringing together a maximum number of both buyers and sellers. Rather than an ad network, a true ad exchange is the neutral, transparent, automated connection between multiple ad networks. AdECN market advertising networks trade on behalf of their advertisers and publishers. This means that AdECN supports, rather than competes with, the various players in the online advertising industry.
The deal is seen as a key component of Microsoft’s strategy to develop a comprehensive search and display advertising platform helping advertisers and publishers to maximize return on investment (ROI) on their digital advertising investments.
“We believe the addition of AdECN to the Microsoft portfolio is a perfect fit and will create more efficiency for the industry by forming a more robust marketplace between advertisers and publishers, aggregating more supply and demand. This is good for the whole advertising industry,” said Kevin Johnson, president, Platforms and Services Division at Microsoft.
Through this deal, advertisers will get access to more inventory, enabling more efficient matching of their requirements, publishers will be able to increase yield, earn more money per page view, due to the higher volume of available inventory and both groups will benefit from the exchange’s neutrality and transparency, enabling them to make more informed decisions about their bid and ask decisions.
“Joining forces with Microsoft will provide the capital and resources to enable AdECN to scale the exchange at a much faster pace, making it more attractive to the advertising networks and other traffic aggregators looking to better serve their advertisers and publishers,” said William Urschel, founder and chief executive officer, AdECN.
The acquisition is expected to be completed in the first half of Microsoft’s fiscal year 2008. The acquisition is not expected to have a significant impact on the financial guidance previously issued by the Company.
AdECN, which has approximately 30 employees, will continue to operate from its headquarters as part of Microsoft’s Online Services Business.
Financial terms of the deal were not disclosed. |
