Facebook Lays Groundwork For Ad Network Off The Social Site
Microsoft's ad-serving business will soon find a new home: at Facebook.
The companies are expected to announce as early as this week a deal that sends Atlas -- the ad server Microsoft acquired in its $6.2 billion aQuantive deal in 2007 -- to the social-networking giant, according to industry executives familiar with the plan.
The acquisition, expected to be less than $100 million, is the surest sign yet that Facebook has designs on becoming an even bigger player in advertising. Facebook is methodically laying the groundwork for an off-Facebook ad network powered by social data, but its plans for Atlas go beyond that .
Essentially, Facebook is looking to rival Google by building out its own "ad stack," or the array of digital-advertising technologies that can power ads from end to end.
Today most advertisers connect to Facebook's display tools and exchange via one of many Facebook third-party API partners. Having its own ad server would allow Facebook to better measure the effectiveness of ad campaigns because big advertisers and agencies could connect directly to the social network. Controlling its own ad technology could also help Facebook open up more data to advertisers without exposing it to intermediaries.
The deal also marks another move away from ad tech for Microsoft, which spent billions competing with Google to build the pipes to power online advertising. Microsoft is , in effect, assisting a partner (Facebook) against a longtime foe (Google). Microsoft invested in Facebook and has a search partnership that combines search results with social recommendations.
Microsoft has allowed Atlas to deteriorate since the acquisition of the ad server, which has lost market share in recent years to Google's Doubleclick for Advertisers. However, it still has some big agency and brand clients, such as AT&T, who use it to serve, track and measure online-ad campaigns.
Atlas had some other suitors, including Mediaocean and AppNexus, another Microsoft partner, but both dropped out of the process. Other bids for Atlas were said to be in the $30 million to $50 million range.
Facebook is a growing power in display advertising. The company is expected to bring in nearly $2.7 billion in 2013, well ahead of Yahoo's $1.4 billion and close to Google's $3.2 billion, according to eMarketer.
Facebook and Microsoft declined to comment.