December 7, 2012
Facebook In Talks To Buy Atlas In Move To Expand Ad Business
redOrbit Staff & Wire Reports - Your Universe Online
Facebook is in "serious" talks to acquire Atlas Solutions from Microsoft, a move that would expand the social network´s advertising business by allowing it to display ads on other websites, All Things D and Business Insider reported on Thursday, citing sources familiar with the negotiations.
Atlas is an ad-serving product that Microsoft acquired through its $6 billion acquisition of aQuantive in 2007. Although the company has seen its market share decline in recent years, and it has long lagged behind Google´s DoubleClick, a Facebook deal would give it vast amounts of new information on ad volume, response rates and pricing.
The deal could also allow Facebook to significantly expand its ad network by displaying ads on third-party websites, a direct challenge to Google´s DoubleClick, according to anonymous sources cited in reports.
While a price for the potential acquisition is not yet known, Facebook has been conducting due diligence on the deal. Business Insider noted that the highest bid for Atlas in Microsoft's previous attempts to sell the business was $30 million.
Facebook has been moving aggressively to expand its advertising business with new capabilities, including mobile advertising and new features that demonstrate the effectiveness of its ads to marketers.
The social network currently generates 86 percent of its revenue from ads that appear on its website.
The true value of a Facebook-Atlas acquisition could be significant, given the information Facebook has on its one billion members, such as their email addresses, home addresses and phone numbers.
This data would allow Facebook to do something no other website can: tell marketers whether or not a Facebook user saw an ad for a product before going to the store and purchasing it.
“This is possible because retailers often have their shoppers' phone numbers, home addresses, or email address on file,” Business Insider said, adding that retailers buy this information from data collection companies.
Facebook could then use their assets to tell marketers exactly how much their sales increased due to ads displayed on Facebook´s website.
Representatives for Facebook and Microsoft have declined to comment on news of the acquisition talks.
Shares of Facebook fell 2.7 percent, or 74 cents, on Thursday, while shares of Microsoft were roughly flat for the day.