It's been hard to root for the home teams lately. The Sonics were pathetic, the Mariners are a yawn. Now it looks like we finally have a...
It’s been hard to root for the home teams lately.
The Sonics were pathetic, the Mariners are a yawn. Now it looks like we finally have a dream team in the combination of Microsoft and aQuantive, the $6 billion blockbuster deal announced Friday.
Pardon the rah-rah, but it’s the best Seattle tech story in years.
In one swoop Friday, Microsoft went from also-ran in digital advertising to a serious contender. It also made a generous offer that prevented another flagship Seattle company from being sold to someone out of town.
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It’s hard to choose sides in the Internet war since Microsoft’s key opponent, Google, is growing into a big, positive presence in Seattle.
But it can be tough for locals to watch the upstart search company clean Microsoft’s clock in the online-ad business. Now there at least will be a decent matchup.
Maybe I’m jumping the gun. Microsoft could flub the merger; it took years to meld the business-software companies it bought during a binge five years ago.
So far, Microsoft is saying the right things. When the deal was announced, platforms chief Kevin Johnson rebuffed analysts asking if Microsoft would chop up the company, saying “we’re going to keep the aQuantive organization intact.”
If you’re not familiar with aQuantive, it’s grown into the biggest independent digital marketer. On behalf of Fortune 500 clients, it buys more online ads in the U.S. than anyone. It’s also been buying smaller firms to expand globally.
Why is this a good deal?
1. Local ownership is priceless. I hate to sound so provincial, but local owners are more invested in the community and less likely to consolidate operations in another city. Remember what happened to Icos and AT&T Wireless.
2. Besides bulking up for the fight with Google, Microsoft is extending its reach across the spectrum of ad services that aQuantive provides. The software giant may pay the piper someday for all the people it’s been hiring, but this seems like smart growth since aQuantive doesn’t overlap.
3. This avoids a spat between neighbors. Microsoft and aQuantive could have grown into competitors as Microsoft tried to build a broader ad service business. Meanwhile, aQuantive is developing technology for serving ads in emerging platforms such as mobile devices and Internet video.
4. It was a classy deal. That’s refreshing after the way some other deals have gone down recently. Neither company jacked around employees and investors with manipulative news leaks.
5. More ads from Microsoft are a mixed blessing, but the region benefits from its big investments and efforts to build sustainable new businesses. I’ll bet that’s partly why our housing market hasn’t flopped.
This deal may help Microsoft deliver more free, ad-supported software and services à la Google. Consumers are coming to expect these freebies, and aQuantive may help Microsoft serve them profitably.
On the other hand, timing could be an issue. Microsoft’s last big crosstown deal, its $1.5 billion purchase of Seattle’s Visio, was at the market peak in 1999 and closed just before the 2000 downturn.
If you’re superstitious, you may wonder if this deal will mark the peak of the current cycle. Some are already predicting the economy will soften later this year, which would lead to less ad spending.
But let’s enjoy the spring and cheer while we have the chance.
Brier Dudley’s column appears Mondays. Reach him at 206-515-5687 or email@example.com.