Social network Facebook, Inc. (FB: Quote) is in advanced talks with software giant Microsoft Corp. (MSFT: Quote) to buy its Atlas Solutions, Inc. advertising platform, according to media reports on Thursday. Microsoft acquired Atlas through their $6 billion acquisition of aQuantive in 2007. A deal also may result in an advertising agreement between Facebook and Microsoft.
The deal will help Facebook boost its advertising business as Atlas will allow it to display ads on other third-party websites. Meanwhile, Facebook is also looking at building its own ad solutions platform.
The Atlas Advertiser Suite is a world-class media measurement platform, delivering billions of impressions every day. Backed by Microsoft scale and infrastructure, it can deliver and accurately measure your digital campaigns cross-channel.
Microsoft has been making attempts to sell Atlas since years, and earlier attempt reportedly saw the highest bid coming for Atlas at $30 million.
Atlas is already an approved ad tracking provider on Facebook since June, which helps advertisers who use Atlas to independently track the delivery and measure the performance of the ads they place on Facebook.
Ad revenues makes out the bulk of the total revenues generated by most of the social network and search sites. Facebook is said to be generating about 86 percent of its near $1.3 billion quarterly revenues through ads posted on its own website.
The proposed deal will provide Facebook an additional revenue source and will compete with Google, Inc.'s (GOOG) DoubleClick ad network that it acquired in March 2008 for $3.1 billion. One of the primary concerns for prospective investors during the Facebook initial public offering in May 2012 was its revenue model.
When Facebook went public in mid-May, it had about 900 million global users, with about 500 million of them logging in every day. Its growth has influenced and put it in competition with established companies such as Google and Yahoo, Inc. (YHOO).
Facebook's IPO, the largest ever for an Internet company, at $38 per share, raised $16 billion, giving the Menlo Park, California-based firm a market valuation of $104 billion, higher than that of Yahoo, Dell, Cisco, Visa, Amazon.com and HP.
However, Facebook's debut is currently under regulatory review due to the technical glitches on Nasdaq that marred the blockbuster offering. The company is also facing lawsuits from investors.
The IPO flop and doubts about the firm's revenue model have hurt its stock price. The stock opened at $42.05 on May 18, about 11 percent higher than the listing price of $38, and moved in a range of $38.00 to $45.00 before closing at $38.23 on debut.
Facebook was launched in February 2004 by Zuckerberg, along with Havard mates Dustin Moskovitz, Chris Hughes and Eduardo Saverin. It soon touched the one-million mark in active users by December 2004, 100 million users in August 2008, 500 million users by July 2010, and 1 billion active users in September 2012, which means that more than one billion users log in to use the site each month.
FB closed Thursday's regular trading session at $26.97, down $0.74 or 2.67% on a volume of 46.00 million shares, while MSFT closed at $26.73, up $0.06 or 0.21% on a volume of 39.19 million shares.
by RTT Staff Writer
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