(19 May 2007 3:35 pm)

MUMBAI: Microsoft has announced its largest acquisition ever, countering multiple bids, by paying a premium price of $6 billion to buy Seattle based online advertising firm aQuantive.

The Redmond company, which made its fortune building software, believes that in an estimated $40 million global digital advertising market, this move would help it rise to the challenges posed by arch-competitor Google Inc.

Internet search provider Google outbid Microsoft last month to snap up online advertising firm DoubleClick Inc. for $3.1 billion. Soon after, Yahoo Inc., another global competitor, gobbled up Right Media, for $680 million.

Shares of aQuantive rocketed 77.84 per cent, a gain of $27.92, to $63.79 after the deal was disclosed yesterday. Microsoft's shares, meanwhile, retreated 0.48 per cent, or 15 cents, to $30.83.

Microsoft has been expanding into advertising and other Internet businesses as its core software business matures.

Its alliance with aQuantive, which owns a cluster of computer servers, an ad network, and an interactive advertising agency, will catalyse its efforts to use online advertising market that is projected to reach $40 billion in 2008 and to grow at 20 per cent a year through the rest of the decade.

The deal also could give Microsoft a leg up in providing ads for game consoles, Internet television and cellular phones. Last month, Microsoft signaled its interest in that market by buying ScreenTonic, a mobile phone advertising firm in Europe.