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The Honolulu Advertiser
Posted on: Monday, March 17, 2008

Microsoft to buy ad firm Rapt

By Jessica Mintz
Associated Press

SEATTLE — Microsoft Corp. plans to buy Rapt Inc., plugging a hole in its suite of tools for Web publishers and advertisers, the software giant said.

Microsoft did not say what it will pay for the privately held San Francisco company.

Rapt's software and consulting services help Web site publishers tweak how they package and price display-ad space.

Scott Howe, a general manager in Microsoft's advertiser and publisher solutions group, said Rapt's system is similar to the one airlines use to set ticket prices and track available seats.

Microsoft said Friday it plans to add Rapt's programs to the Web publisher tools it gained when it acquired aQuantive last year for $6 billion.

The move "puts us way ahead of what other offerings are available in the market," Howe said in an interview, likening Microsoft plus Rapt to a jet plane — and competitors, including Google Inc., to a bicycle.

Microsoft has had hands-on experience as one of Rapt's customers. Tom Chavez, Rapt's chief executive, said in an interview that his company's technology helped boost MSN's ad revenue 15 percent to 20 percent, a typical improvement.

Rapt, which employs about 85 people, plans to remain in California. Microsoft expects the deal to close in the next month or so.

The Redmond, Wash.-based software maker has bought several companies to fill out its digital ad offerings, including AdECN, a stock market-like exchange where networks representing Web sites buy and sell ad space, and Massive, which inserts ads into video games.

Microsoft, for its part, is waiting for Yahoo Inc. to respond to its unsolicited $40-billion buyout offer, which it hopes will help it catch Google in the search ad business.