Microsoft Dives into Online Ad Game

Microsoft has announced that they will buy online ad agency aQuantive for a whopping $6 billion, twice what Google said they would buy DoubleClick for and what is considered 85% over aQuantive's value.

Beyond traditional display and textual online advertising, Microsoft will use this new ad network to target very specific audiences - a move many see as the new frontier of online ads. The ad venues will be mobile advertising, podcasts, video games and Internet television. It's a bold move and a serious swipe at Google's dominance in the online ad space.

eMarketer projects online advertising to reach $36.5 billion by 2011. "These companies are making a pretty big bet that online advertising is going to pay off in a big way," said Shar VanBoskirk, online marketing analyst at Forrester. "Six billion is a little to pay if the payout is a third of the $600 billion ad industry."

This move negates the rumored Microsoft and Yahoo deal and now puts the pressure squarely on Yahoo to keep up.