Microsoft Acquires Online Advertising Firm Rapt

Microsoft on Friday announced its plan to acquire an online advertising management company, Rapt Inc., for an undisclosed amount. The move indicates software giant’s latest effort to make its foray into the highly profitable Internet advertising world.

The Redmond company said it has signed a deal to buy the San Francisco-based online ad technology firm Rapt, however, it did not say what it will pay for the privately held company.

Microsoft said it will integrate Rapt's Web-based software into its Atlas Publisher Suite, a set of tools used by Web sites to manage advertising. Microsoft gained the Web publisher tools when it acquired aQuantive last year for $6 billion.

Rapt specializes in offering advertising yield management tools for online media companies. Rapt-made software helps companies manage their online advertising operations, including determining the most profitable pricing and placement strategies.

“Online publishers have a complex array of needs, and they require more attentive and sophisticated partners to help them solve these challenges,” said Brian McAndrews, senior vice president of the Advertiser and Publisher Solutions Group at Microsoft. “With this acquisition, we are uniquely positioned to help publishers succeed on all fronts. Our end-to-end solution will include workflow tools, ad package and delivery, turnkey distribution, content partnerships, and yield management and optimization.”

With the addition of Rapt’s Web-based management software, the Atlas Publisher Suite Microsoft would now be able to provide its customers with integrated asset and inventory management, forecasting, yield and sales management, and ad delivery and operations.

Founded in 1998, Rapt has offices in San Francisco and New York City, and employs about 85 people. This privately held company is funded by Accel Partners and Levensohn Venture Partners. Raft provides pricing and profitability management software that helps clients analyze and improve their pricing decisions, prioritize their supply investments, and boost their profits.

Rapt delivers critical yield management technology to major media companies such as MTV Networks, NBC Universal, NewsCorp.'s Fox Interactive Media, Dow Jones & Company, Yahoo! as well as Expedia, New York Times, Reuters, and USA TODAY.

“The opportunity to join forces with Microsoft and to see our technology flourish inside a much larger platform was too compelling to pass up,” said Tom Chavez, founder, President and CEO of Rapt. “We’re confident that, with Microsoft, we can continually improve publisher results and aggressively grow our combined client base that already includes over half of the top 25 U.S. publishers.”

Meanwhile, Microsoft is waiting for Yahoo Inc. to respond to its unsolicited $40-billion buyout offer, which it hopes will help it challenge Google's newly-established dominance in the online search and advertising markets.
Officials from both the companies reportedly met earlier this week to hold informal talks on a merger proposal, but the talks did not end with any fruitful results.