Facebook Deal to Buy Microsoft's Atlas Coming As Soon As Next Week

Social Network Is Building An Ad Stack to Rival Google

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Microsoft's attempt to find a new home for its Atlas ad-serving business may finally be coming to an end. The company is expected to announce a deal to sell it to Facebook as early as next week, according to multiple people familiar with the plans.

The acquisition price is not known, but is expected to be less than $100 million, based on prior bids for Atlas, which have been in the $30 to $50 million range.

The acquisition would be the surest sign yet that Facebook has designs on becoming an even bigger player in advertising than it currently is now. Facebook is methodically laying the groundwork for an off-Facebook ad network powered by social data, but that's not the only reason it wants Atlas.

Facebook is very focused on proving the worth of the data it sits on as well as the effectiveness of its ads. Owning an ad server would allow big advertisers and agencies to connect directly to Facebook to better measure the effectiveness of their campaigns. Now, most advertisers use one of the many Facebook ads API partners, third parties that connect to Facebook's display tools and exchange.

Controlling the ad technology stack from end to end could also help Facebook eventually open up its data to advertisers in a more controlled way, without exposing it to intermediaries.

Essentially, Facebook is looking to build a full array of digital-advertising technologies to rival Google. Yes, Facebook wants its own ad-tech stack.

Atlas still has some big agency and brand clients, such as AT&T, who use it to serve, track and measure online ad campaigns. But its market share has suffered in recent years as it lost out to other top ad servers, such as Google's Doubleclick for Advertisers. Facebook will likely continue to serve Atlas' biggest customers and may feel that if it invests in Atlas it will have a chance of building an ad-serving product that once again rivals Doubleclick.

Business Insider and AllThingsD first reported in December that the two sides were in discussions.

For Microsoft, the landing spot is as good as they could have expected: Microsoft has invested in Facebook and Facebook is also a threat to Microsoft's longtime foe, Google.

Ad Age broke the news in October that Microsoft was in discussions to sell Atlas. At the time, AppNexus, in which Microsoft owns a stake, was seen as the frontrunner. Mediaocean was also seen as a possible suitor and Adobe took a look but passed on making a bid. All of those companies eventually dropped out of the process. The highest bid prior to Facebook's interest was believed to be about $40 million.

Microsoft acquired Atlas as part of its $6.2 billion aQuantive deal in 2007, when it was busily racing Google to build the pipes that power online advertising. Now Microsoft is more focused on its own platforms and technologies such as Windows 8 and Xbox; rather than own the advertising technology, it seems it would prefer to partner with an array of outside companies, as it did with AppNexus in 2010.

Facebook and Microsoft declined to comment.

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