May 1, 2007 -- Eager to catch up with Google and Yahoo!, Microsoft has emerged as a contender, along with ad giant WPP Group, to buy Internet ad firm 24/7 Real Media, The Post has learned.
Sources said the software giant is considering a price in the $1 billion range for 24/7 Media - a giant leap from the $600 million valuation analysts placed on the firm.
Microsoft, which has been kicking a lot of tires in the last few weeks, is getting serious about the ad firm after two of its fiercest rivals increased their online arsenals through similar acquisitions.
Yahoo! announced yesterday it would buy the 80 percent of online ad exchange Right Media it didn't own for $680 million, valuing the entire firm at around $850 million. The acquisition follows Google's $3.1 billion deal for DoubleClick, which serves up and tracks Web ads.
Microsoft's deep pockets and fear of falling behind rivals could further drive up the price for 24/7 Real Media, one of the remaining players in the same space.
Yahoo!'s pouncing on Right Media after Google's DoubleClick deal also drove up prices for 24/7 Media and other Internet ad firms.
A Microsoft spokeswoman declined to comment on what she described as speculation and rumor.
"The longer they waited, the more they would have to pay," said Kevin Lee, chairman of search-advertising firm Did-it.com.
The wave of consolidation in the Internet ad space already has investors buzzing about a potential buyout of 24/7 Real Media, whose stock spiked 17 percent the day The Post first reported that WPP was in talks with the firm.
WPP, the No. 2 ad agency holding company, is less likely to win a bidding war for 24/7 Media, with analysts doubting it has the financial firepower to match Microsoft.
Although speculation is rife that Microsoft would also consider buying DoubleClick competitor aQuantive, the software giant appears more likely to take a pass. Along with ad-serving capabilities, aQuantive also owns Web creative ad agency Avenue A/Razorfish.
"A big part of [aQuantive's] business doesn't fit with them," said one source.
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