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Brier Dudley's blog

Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

May 18, 2007 at 5:09 PM

aQuantive perspectives on Microsoft

I’ve had some interesting conversations with aQuantive executives in recent months, and one thing stuck out when I learned about the company’s sale to Microsoft.

Last week I asked aQuantive Chief Executive Brian McAndrews about how he manages a company that you can’t describe in a few sentences.

Here’s his response:

“It is complex but the flip side of that is one of the reasons we’re doing so well is the industry is so complicated — complexity is our friend, because our job is making it easier for our clients,” he said. “If it was a simple thing, they wouldn’t need us, they’d just do it themselves.”

That’s worth mentioning again because it’s similar to what Microsoft has done with computing. From the start, the company has tried to build products that take complexity out of using computers, whether they’re hobbyists, office workers, IT administrators or programmers.

Think of Microsoft as a layer between the user and the hardware. You use Microsoft products so you don’t have to touch all the components.

This is similar to role aQuantive plays with big companies that want to run online marketing campaigns. To run a broad marketing program, they have to plug into all sorts of areas on the Web — search ads, display ads, etc. The services that aQuantive provides are like a layer of software that coordinates all of this activity, analyzes its performance and helps companies track results.

That makes me think the companies will sync, if they keep focusing on absorbing the complexity their customers otherwise have to deal with.

Google is trying to do the same kind of thing. It simplified the process of placing and optimizing search ads, to the point that it’s largely a self-service business for small advertisers.

Another interesting tidbit from the McAndrews interview was the value being independent had to aQuantive. He said advertisers appreciated having a marketing partner that wasn’t the recipient of placed ads:

“If that tool is owned by one of the places you’re sending your dollars, it certainly creates a conflict.”

Earlier, in March, I interviewed Jeff Lanctot, senior vice president of aQuantive’s Avenue A | Razorfish agency. Around that time Yahoo! was rolling out its Panama ad-serving product to compete with Microsoft’s adCenter and Google’s adSense systems. He was candid about the Redmond company’s situation:

“The issue that both Yahoo! and Microsoft have to varying degrees is even if they build a great search advertising products they still have query share problems that need to be adressed. AdCenter is a very well regarded ad platform but Microsoft is still challenged to increase its query share.”

I asked outright about aQuantive being an acquisition target. Lanctot’s answer:

“Our belief is that there is room in the industry for one global independent agency and clearly that’s us right now. The falloff between us and the next biggest in terms of independence is a pretty steep one, in terms of revenue, particularly since Digitas [was acquired]. But we think there is enough room for one at least, and that’s us now and we intend it to be us in the future. So we think that independent approach is the right one.”

Then again, $6 billion is hard to resist.

Comments | Topics: Microsoft

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