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Microsoft today opened a new front in its war with Google for online advertising dollars, with a $6bn cash offer for the Seattle-based online advertising group aQuantive.

This is Microsoft's biggest acquisition to date, and boy, does it want the company: the $66.50 per share offer is an 85 per cent premium on aQuantive's closing price of $35.87 yesterday.

aQuantive has about 2,600 staff and owns the interactive agency Avenue A / Razorfish and an ad serving company called Atlas. It also has an online advertising exchange network called Drivepm - which aggregates excess inventory from publishers and resells it to advertisers. Microsoft is to merge its advertising platform with Atlas.

In a conference call with analysts today, Brad Smith, Microsoft's general counsel, said the aQuantive deal was "complementary", and encouraged authorities in and outside the US to scrutinise its offer.

This has been a hectic time for mergers and acquisitions among ad-serving companies. This week WPP, the UK advertising giant, bought 24/7 Real Media for $600m and AOL bought ADTech, the German ad serving company, for $100m or so - at least that's what sources tell the WSJ.

Last month, Microsoft famously lost out in the race to buy ad-serving front-runner Doubleclick. It thought it had a deal in the bag with a $2bn offer, but the Google out-trumped it with an hilarious $3.2bn. Remember, Doubleclick is a company with $250m revenues. Even more hilariously, Microsoft said the Google-Doubleclick combo was anti-competitive. Sour grapes maybe, but industry gossip has it that Microsoft was turned down by Doubleclick, even after offering to match Google's bid.

The acquisition feeding frenzy reflects the current fashion among online publishing giants to own their own display ad serving technology, to own a search advertising platform, to run their own advertising exchange networks - to reach out to smaller publishers, and now to have their own creative and media buying arms. Google is leading the charge - and everyone is playing catch-up. Yahoo!, for example, has as many users as Google - or thereabouts - but is a lot less successful at monetising them. This is why the company is making such great play of Panama, its shiny new contextualised ad search engine, which should, it hopes, give advertisers as good a return as they get from Google. Yahoo! is also in the acquisition game, last month adding distribution heft, through the $680m acquisition of the 80 per cent of Right Media, an excess inventory advertising network, that it did not own already.

Microsoft is growing less quickly than Google, but it is still a helluva lot bigger company and it could - if it wanted, and if regulators let it - cough up the $50bn that Yahoo! would cost to buy. But first things first. The company has a new $6bn baby to play with. And it wants to play with it every which way.

Kevin Johnson, Microsoft's platforms and services chief, said the company wants to have its online ads "reach consumers on every connected device on the planet" The company aims to deliver adverts through websites, video on demand channels, IPTV, computer games, and mediums it already owns, such as MSN, Xbox, Windows, and Office Live, and also third party publishers and applications such as Facebook and Activision game titles. ®

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