aQuantive: From survivor to sought-after

Seattle-based aQuantive has come a long way from Avenue A.

That was the name of the money-losing Internet advertising agency that went public in February 2000, mere months before the dot-com bubble collapsed. Several acquisitions, a long bear market and one name change later, aQuantive's employees and shareholders hit pay dirt last month, when Microsoft agreed to buy it for a cool $6 billion, or $66.50 a share.

That deal, which capped a string of acquisitions in the online-advertising world, was a testament both to that industry's rapid growth and future prospects — Microsoft estimated the global market is worth $40 billion — and to the business model aQuantive has built up since its founding 10 years ago.

The original Avenue A's main business was planning online-marketing campaigns and buying ad space on Web sites for them. After going public and surviving the Internet shakeout, Avenue A started buying other online-media firms — ultimately acquiring a dozen, both domestically and overseas — and broadening its portfolio of service offerings.

Today, aQuantive (it adopted the name in 2003) has three main business segments: the largest, built around the original Avenue A, develops Web sites for clients and provides interactive marketing; a second uses aQuantive's proprietary technology to manage and track ads; the third buys Web ad space from publishers in bulk and resells it to advertisers.

That top-to-bottom menu of services made aQuantive attractive to potential suitors — especially after other online-advertising firms started hitting the auction block. Just this spring, Google agreed to buy DoubleClick; Yahoo! scooped up Right Media; and the WPP Group, one of the world's largest traditional advertising companies, hooked up with 24/7 Real Media.

As the largest free-standing digital-marketing company, it was no surprise aQuantive would get multiple bids. Still, tech-industry watchers whistled in awe at Microsoft's $6 billion offer — it will be by far the Redmond company's biggest acquisition.