Blog Post

Market For Online Ad Firms Heats Up; MSFT And 24/7?

The Google-DoubleClick deal started the latest round of activity and spec in the online ad firm marketplace; the Yahoo-Right Media deal added fuel. Why not? That’s nearly $4 billion of activity right there for a form of advertising that now lags behind search advertising.

BW takes a look at why display advertising and the companies that make it easier to do online are getting more popular: “A pumped-up price is only part of the reason Yahoo has made 32-year-old (Right Media CEO Michael) Walrath and his team of 20-something executives multimillionaires. Yahoo is able to gather information on the surfing habits of users who flock to its sites and search tools. Right Media helps Yahoo use that data to better deliver tailored ads across the Web. … Arguably, DoubleClick’s ad exchange has similar appeal for Google.”
— “Yahoo expects Right Media to bring in $70 million this year from the roughly 7 percent fee it charges on approximately 6 billion daily transactions. Those revenues alone did not justify the $725 million purchase.”

The real fun is in speculating what will happen to 24/7 Real Media(NASDAQ: TFSM), reported to be a target of interest for Microsoft and WPP. The latest from the NYP: Microsoft might be willing to spend $1 billion or so on the firm, which would be considerably more than the $500 million market cap. The stock hit a 52-week high Monday at $11.05 per share. Of course, there’s also lots of talk about Microsoft and aQuantive.