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Microsoft to buy Web advertising analysis company

Associated Press

SEATTLE — Microsoft Corp. plans to buy Rapt Inc., plugging a hole in its suite of tools for Web publishers and advertisers, the software giant said Friday.

Microsoft did not say what it will pay for the privately held San Francisco company.

Rapt's software and consulting services help Web site publishers tweak how they package and price display-ad space.

Scott Howe, a general manager in Microsoft's advertiser and publisher solutions group, said Rapt's system is similar to the one airlines use to set ticket prices and track available seats.

Microsoft plans to add Rapt's programs to the Web publisher tools it gained when it acquired aQuantive last year for $6-billion (U.S.).

The move “puts us way ahead of what other offerings are available in the market,” Howe said in an interview, likening Microsoft plus Rapt to a jet plane — and competitors, including Google Inc., to a bicycle.

Microsoft has had hands-on experience as one of Rapt's customers. Tom Chavez, Rapt's chief executive, said in an interview that his company's technology helped boost MSN's ad revenue 15 per cent to 20 per cent, a typical improvement.

Rapt, which employs about 85 people, plans to remain in California. Microsoft expects the deal to close in the next month or so.

The Redmond, Wash.-based software maker has bought several companies to fill out its digital ad offerings, including AdECN, a stock market-like exchange where networks representing Web sites buy and sell ad space, and Massive, which inserts ads into video games.

Display advertising hasn't gotten as much attention as search ads, thanks to Google's unparalleled ability to turn search queries into billions of dollars in revenue.

But that may be about to change with Google's first big push this week into display advertising as it closed its $3.1-billion acquisition of online ad services company DoubleClick.

Microsoft, for its part, is waiting for Yahoo Inc. to respond to its unsolicited $40-billion buyout offer, which it hopes will help it catch Google in the search ad business.

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