Business software may be profitable, but the growth and sex appeal is in advertising. At least, Microsoft seems to thinks so. Amidst efforts to make headway with its takeover offer for Yahoo, the Redmond giant today said it’s agreed to buy online ad analytics firm Rapt. Terms of the deal weren’t disclosed. It’s a move that could be important for Microsoft because it would give the company the ability to see how much advertisers are paying for online ads and what their conversion rates are — an ability Google already has through Ad Manager and Google Analytics.
This worries some in the advertising industry. When a company like Google or Microsoft can track what an advertiser is paying for ads and the conversion rates across multiple sites, they can estimate how much an advertiser might be willing to pay — and raise the price to that ceiling. Transparency in markets is generally a good thing, but in this case it benefits Google and Microsoft — not necessarily the wider world of publishers and advertisers.