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Microsoft Buys Auction-based Ad Exchange

AdECN Similar to Right Media, But Smaller Player

By Published on .

NEW YORK (AdAge.com) -- Three months after Yahoo snared Right Media, Microsoft has gotten itself an ad exchange. The Redmond, Wash., giant announced at a analysts' conference that it had purchased AdECN, an online ad exchange founded by CEO William Urschel in 2003.
AdECN is a real-time stock-market-type system for online ad inventory.
AdECN is a real-time stock-market-type system for online ad inventory.

AdECN is a real-time stock-market-type system in which ad networks and publishers who have inventory they need to sell can post it to the auction and other networks and publishers who may be in need of that particular kind of inventory can buy it. Advertisers can also buy directly. The inventory is bought and sold in the form of ad impressions.

Neutral hub
The idea is that the buying and selling of online advertising can become more efficient in a network and can allow publishers to better monetize the remnant inventory that can often go unsold by matching a larger swath of buyers. Mr. Urschel likens it to how the Nasdaq market services financial brokerages as a neutral hub where demand meets supply.

Yahoo bought ad exchange Right Media earlier this year. In late 2006, Yahoo purchased a 20% stake in Right Media; the additional 80% was purchased for $680 million. Terms of the AdECN deal were no disclosed; the Santa Barbara, Calif., company has 30 employees.

AdECN was a smaller player than Right Media in the U.S. and had appeared to have made most of its in-roads in the U.K. market, where it has lined up a consortium of British ad networks to use its exchange.
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