Redmond, Washington-based Microsoft announced Friday that it has signed an agreement to purchase  privately held San Francisco-based Internet advertising management firm Rapt, as it looks to strengthen its online advertising services in the wake of search leader Google, which earlier this week finalized its $3.1 billion purchase of Web ad firm DoubleClick. Financial details of the agreement, such as how Microsoft will pay for Rapt, were not disclosed. Rapt offers applications and consulting services that help Web publishers manage display ads - which typically contain images, video or sound - and control how they are priced and presented online. Founded in 1998 and employing about 85 people, Rapt has several major online firms as clients, including the following:  | Microsoft | | Expedia | | | Yahoo | | The New York Times Company | | | CNET Networks | | Dow Jones & Company | | | Fox Interactive Media | | MTV Networks | | | NBC Universal | | Reuters | | | USA Today | | | In February 2008 Rapt signed an agreement with ad agency Publicis, which has a partnership with Google. From a Client To An Owner Microsoft has worked with Rapt for four years and now becomes the owner of a firm offering a system similar  to airline industry software for pricing tickets and keeping track of available seats, according to Microsoft advertiser and publisher solutions group general manager Scott Howe. Howe likened the online advertising service a combined Microsoft and Rapt will be able to provide with that of a jet airplane, and compared Google and other competitors to bicycles, in a recent interview cited in a Washington Post article. The acquisition of Rapt, which is expected to close within the upcoming months, "Puts us way ahead of what other offerings are available in the market, Howe added. The addition of Rapt was made to help fill certain gaps in Microsoft's online advertising services remaining after its $6 billion purchase of aQuantive in 2007, and by combining the two firms expect to create "an integrated publisher sales workflow solution," according to Microsoft. Rapt Counts Yahoo As Client "Online publishers have a complex array of needs, and they require more attentive and sophisticated partners to help them solve these challenges," said Brian McAndrews, senior vice president of the Advertiser and Publisher Solutions Group at Microsoft, in a statement released Friday. "With this acquisition, we are uniquely positioned to help publishers succeed on all fronts. Our end-to-end solution will include workflow tools, ad package and delivery, turnkey distribution, content partnerships, and yield management and optimization," McAndrews added. Rapt, which plans to keep its offices in California, has worked with Yahoo in the United States since 2004 and globally since October 2005, providing the Sunnyvale, California-based Web pioneer with its Price Director software, according to Rapt. In December 2007 Rapt held talks relating to combining technologies with DoubleClick, which is now a part of Google's rapidly-growing collection of online companies, Rapt said. Chief Executive Chavez Confident Rapt founder, chief executive and president Tom Chavez said the merger with Microsoft will benefit both firms  and their respective clients in the online advertising market. "We’re confident that, with Microsoft, we can continually improve publisher results and aggressively grow our combined client base that already includes over half of the top 25 U.S. publishers," Chavez said in a recent interview. "The opportunity to join forces with Microsoft and to see our technology flourish inside a much larger platform was too compelling to pass up," Chavez added. Rapt specializes in helping online publishing customers predict how much money they can expect to collect from various Web ad placements, and to determine whether more money could be made using ad networks or by selling directly. As an example of the type of advertising revenue growth Rapt clients have seen, Chavez pointed to Microsoft's MSN, which he said experienced between 15 and 20 percent growth. Microsoft Buys Internet Advertising Management Firm Rapt Microsoft has said it plans to incorporate the Rapt services into its Atlas Publisher Suite, part of Microsoft’s Advertiser and Publisher Solutions Group. "With the inclusion of Rapt, the Atlas Publisher Suite allows Microsoft to provide its customers with integrated asset and inventory management, forecasting, yield and sales management, and ad delivery and operations," Microsoft said in the Friday statement. Microsoft's acquisition of Rapt, coming so closely on the heels of Google's acquisition of DoubleClick, seems bound to heat up the growing rivalry between the firms as each seeks to outpace the other in the lucrative online advertising market. Microsoft noted the importance of the online advertising market in a statement last month as it announced its intention to pursue a takeover of Yahoo, citing estimates predicting growth in the area "from over $40 billion in 2007 to nearly $80 billion by 2010." Related Links:
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10:53 pm on Mar. 14, 2008 (utc 0)