Your questions: “What is going on? aQuantive… sounds like a Silicon Valley deal.”

I was asked this morning by a friend from down south at a not-so-small Internet services company: “What is going on up there [in Redmond]? Six billion for aQuantive? That is a bunch of money. It sounds like a Silicon Valley deal.”

A new record-setting, massive Microsoft acquisition, the largest the company has done. And yes, it sounds more of the type of acquisition you’d see being made in 94025, 94306 or 94043 rather than 98052.

The Seatte Times has a couple of articles today that take a look at the aQuantive acquisition announced yesterday, including this one on “What Microsoft saw in aQuantive: tools, tech and top-tier ties” from reporter Kim Peterson.

“Still, the acquisition news left some wondering why, exactly, Microsoft would pay so much for an advertising company. What is aQuantive all about, anyway?

“The 10-year-old company has grown mainly by offering top-to-bottom services for advertisers. It helps them create advertising and branding campaigns. It serves, or electronically places, those ads on popular Web sites for maximum exposure. And it offers sophisticated tools for tracking when people clicked on those ads and what they did on the Web site that followed.

“If you went to a banking site, for example, aQuantive’s system would note that and could show you ads for that bank when you visited other Web pages. And it wouldn’t be the same ad each time, either. The system could show you a sequence of ads targeted to your interests.

“AQuantive also creates Web sites for companies. It built the Postopia.com gaming site for Kraft, for example, and a site about youth travel programs for Disney. It created a “Fanta-island” Web site to help the Fanta beverage company reach out to teenagers.”

From my friend: “I’m surprised that you [referring to Microsoft corporate, not me personally] didn’t buy 24/7 [Real Media] for their technology [ad management systems and analytics]…” which was WPP’s announced purchase this week, for roughly a tenth of the aQuantive deal.

Good question.

Given the number of online properties Microsoft has, across Microsoft.com (plus popular subsites like Office Online), Live, MSN, MDSN, TechNet and Xbox, there is an opportunity to leverage AQuantive’s experience in the complete cycle os ad services, from develpment to placement and ultimately the analytics to see how the ads fare in the marketplace.

Given Google’s $3.1 billion purchase of DoubleClick to augment their display advertising business, as well as Yahoo’s controlling purchase of Right Media, I wonder about the future of other online advertising technology company firms, including as ValueClick and Viewpoint.

See also Times’ reporter Benjamin Romano’s article “For $6 billion, Microsoft buys huge slice of online-ad pie” which includes this excerpt:

“Asked whether the acquisition is in part to prevent a competitor from getting aQuantive — one the last large independent digital-advertising houses — Johnson talked only of the opportunity.

“We looked at how rapidly this industry is consolidating and unfolding, and we felt like now was the time to put a stake in the ground that says we are going to take our advertising platform to the next level and we are committed to this industry for the future growth of our company,” Johnson said.”