UPDATE: FTC Clears Microsoft's $6 Billion AQuantive Buyout
SEATTLE (AP)—Microsoft Corp.'s (MSFT) $6 billion acquisition of online advertising group aQuantive Inc. (AQNT) has cleared an antitrust regulatory hurdle, the companies said Friday. — The Federal Trade Commission mandates …
Context & Ripple Effects
When Microsoft announced the $6 billion aQuantive buyout on May 18, it was the company's largest acquisition ever and an explicit bet that software firms — not just media intermediaries — would own the machinery of online advertising. Two days later, GigaOM asked whether Microsoft had gone and lost its head over the price, capturing the skepticism that a Windows company could pay roughly double aQuantive's market value and earn it back.
First-order effects
- The FTC clearance removes the last major regulatory gate, letting Microsoft proceed toward closing the deal and folding aQuantive's ad-serving and agency businesses into its online services operation.
- AQuantive shareholders and management move from deal limbo to payout-and-integration mode, with the premium price now locked in regardless of how the ad business performs.
Second-order effects
- The $6 billion price sets a valuation benchmark that raises the cost for any rival trying to buy comparable ad-serving or digital-agency assets, while Microsoft's online division now has to justify the spend against its established Windows and Office cash flows.
- Commentators who faulted Microsoft for buying technology others built rather than improving its own lineup get a fresh test case: integration failure here strengthens the argument that acquisitions substitute for organic product strategy.
Third-order effects
- If the pattern holds — big software platforms paying premiums for advertising infrastructure and antitrust authorities waving them through when the acquirer lacks an ad franchise — deal review becomes routine gatekeeping for the web's business model rather than a serious brake on consolidation.
The trend: Platform software companies are acquiring their way into the online advertising stack, with regulators clearing deals based on market overlap rather than questioning the strategic logic behind the prices.