Microsoft pays $6b for online ad firm

Microsoft, not wanting to get left behind rivals in an online advertising boom, agreed to pay $6 billion in cash to acquire aQuantive, a leading agency for Internet ads which also has powerful technology that serves display and banner ads to other Web sites, an Associated Press report said.

The Associated Press report said the eye-popping premium of 85% Microsoft is paying for aQuantive reflects a heated race for the few remaining online advertising businesses, as media and technology companies jockey for position in the Internet advertising market.

The report added that the deal caps a month of furious activity in the sector which began in mid-April with Google's $3.1 billion purchase of DoubleClick, a company that provides technology used by Web site publishers to deliver advertisements to viewers.

Google is already the leading provider of keyword search advertising, which suggests 'sponsored' links along with search results, the report said.

Companies like DoubleClick and aQuantive help provide the delivery of 'display' ads on Web sites such as banners and boxes, which lead users to advertiser's Web sites, the report said.

The report further said for Microsoft, getting aQuantive could jump-start its online advertising business, which lags far behind Google and Yahoo Inc. due to the lower traffic on its own destination Web site, MSN.