Can you say Google FAST???

Microsoft Pays $6 billion for aQuantive: Massive Ad Network Consolidation Is Occuring

Breaking: Microsoft is acquiring advertising network aQuantive the parent company to Avenue A | Razorfish, Atlas and DRIVEpm, for roughly $6 billion in an all-cash transaction, the company said this morning.

aQuantive is a public company (AQNT) and had a market cap of just $2.8 billion as of yesterday. The acquisition price of $6 billion is a roughly 2x premium on yesterday’s closing price, which is a reflection of the fact that this were competing bidders (see notes below). The acquisition comes after recent big acquisitions by Google and Yahoo in this space. Google bought Doubleclick for $3.1 billion in April. Later that same month, Yahoo acquired competitor RightMedia for $680 million. Just yesterday, WPP Group acquired yet another company in this space, 24/7 Real Media, for $649 million.

2006 revenues for aQuantive were $442 million. Net income as about $54 million.

aQuantive’s operating companies include both tools and ad agencies. The company is located in Seattle.

Microsoft is held a media call this morning to discuss the transaction. My notes are below. At about 7 am PST a recording of the call will be available at 1-800-774-9248.

Notes From Media Call:

(see CenterNetworks as well, Allen Stern has taken very complete notes)

Deal brings lots of new relationships with publishers and advertisers

Microsoft is now able to sell display ads on any website

Good tools for rich media ads, including IPTV

aQuantive was founded in 1997.

Microsoft says they are showing they are willing to aggressively grow strategically. Ad market is predicted to grow dramatically over the next few years. Lots of synergies between companies. Will be able to better monetize microsoft inventory, and will now be able to sell display ads on third party sites. Financial implications to MS: deal will close in FY 2008. They do not think it will have a significant impact on MS operating income.

MS expects an antitrust review in the U.S. and maybe in other countries. Probably not EU, but perhaps in Germany.

MS talking about privacy: says aQuantive has high degree of respect for privacy and fits well with Microsoft’s privacy policies.

Bear Stearns question: does this affect MS’s opinion on Google/doubleclick transaction. MS: no, not at all. Says this will promote competition and Google/doubleclick will hurt competition. Microsoft is in none of the businesses that aQuantive is in, whereas Google was already in direct competition with doubleclick and will give Google 80% market share in those markets.

question on how difficult integration will be with MS’s Adcenter platform? MS says online ad market is $40 billion annually and growing 20% per year. Says MS is committed to getting their share of the market, and this deal gives them a more complete end to end solution (paid search, display ads, CPA). MS says the deal will make their time to market much quicker. They are looking to consolidate their inventory from MS sites to create more scale for ad network. Talking about MS’s new software + services model, phones, games, IPTV, etc. and that advertising will drive these businesses.

MS has a long relationship with aQuantive, has been a customer for many years.

question on the size of the premium v. yesterdays closing price for aQuantive. MS says if they can drive growth through acquisition better than through internal growth they will do it. “we have the economic fire power to do more if we wish to”. MS says this was a competitive bidding situation, and “we are delighted to have won”

MS is saying that there is very little overlap between the two companies, the products are highly complementary.

this is largest MS acquisition to date, but this is only 2% of MS market cap, and they have $35 b in cash on had.

TechCrunch

New Stuff At My Yahoo

The big guys are really starting to focus on personalized home pages, where Yahoo dominates and Google is coming on strong (by adding a link from the Google.com home page). Google says their personalized home page has been their fastest growing product over the last few fiscal quarters. Pageflakes and Netvibes are two notable startups in this space.

Tonight Yahoo is announcing a few enhancements to the recently relaunched My Yahoo: a new calendar module, a My Netflix module that uses the Netflix API and an update to the Yahoo Bookmarks module.

The calendar module has read/write functionality (as it should). My Netflix lets users see what movies have recently been released on DVD, the movies in your queue and movies you have at home. The main addition to the bookmarks module is the ability to add new bookmarks directly from the module.

The new features will be rolled out on Thursday. Screen shots are below. The first one shows the calendar and netflix modules.

eBay, meet YouTube

Better late then never, as they say, but eBay has finally sanctioned embedded videos, a time-tested practice pretty much everywhere on the interest these days.

Sellers may now include a video right in their ad (let’s be honest, it’s going to be a YouTube video) to provide a level of advertisement beyond mere images and words (here’s a listing for a Lego figure with video embedded).

This is especially good news for sellers with high ASPs since it allows you to really show off your product from many angles (increasing conversion rates, if done right). Real Estate agents have been using online videos for a while and personally it’s starting to look suspicious if you don’t have a video available for your house. I can see this turn into a must-do shortly on eBay Motors (want an example of how NOT to do it? — warning, may make you dizzy).

Here are a few helpful resources to get you started:

• Business Week podcast on selling on YouTube
• YouTube Marketing Tips (with link to good article on product marketing using YouTube)
• Excellent tutorial on getting optimal video results
• YouTube tools & more!

Is Your Business Growing? You May Qualify for the Inc. 5,000

You set out to build a successful company... and you've done it! Now, it's time to make sure the world knows about it.

Inc. magazine is recognizing the 100 fastest-growing private businesses in every major metro area and every major industry in the U.S. Together, these fast-growing private companies will comprise the Inc. 5,000, an editorial award from the most prestigious private-business magazine in the country. The 500 fastest-growing companies will be profiled in the September issue of Inc. magazine and all 5,000 will be profiled online on Inc.com.

Click to Apply for the Inc. 5,000!

For 26 years, Inc. magazine's editorial staff has done extensive research to identify the fastest-growing companies. Many well known companies, such as Microsoft, Timberland, and Domino's Pizza, were recognized by Inc. long before they became household names. But we've also helped gain recognition for thousands of smaller companies looking to raise their profile within their industry or region.

The list is a great way to recognize your company's success - and not only in the pages of Inc. Stories about last year's list in local and national press were seen by more than 25 million people.

Applying for the Inc. 5,000 is free, easy, and takes only minutes.

Go to www.inc5000.com to learn more and apply. The deadline is May 15^th, so apply today!

Vision Experience 28-foot inflatable theater

Vision Experience 28-foot inflatable theater

Price: $19,999

Sometimes watching a movie indoors just won't cut it. So create your own drive-in with the Vision Experience's complete package, which includes a gigantic blow-up screen, an HD-capable projector and a full sound system. The company suggests playing your Nintendo Wii on this screen. And if you spill your beer or popcorn, don't worry--it's machine-washable.

10 Ripe Areas for Starting Your Business

Big Dreams, No Cash: 10 Businesses You Can Start Today on a Tight Budget

by S. Tia Brown

Eden Reff dreamed all her life of opening a restaurant. But she couldn’t dream up the money to pay for it.

By 2003, Reff's financial situation still hadn't changed. Her resolve had. She decided to stop letting poor finances stand in her way and her future as a businesswoman.

"I saved money from my tax returns and started out making southern-style pies," she says. "I sold them around the winter holidays."

The pies were a hit. Today Reff, 31, operates Artistic Edibles, a full-service, home-based catering company in Mount Rainier, Md.

Starting a service- or talent-based business out of your home is an ideal choice for first-time entrepreneurs, and for a simple reason: They don’t require a lot of capital.

"If you have a talent that others are willing to pay you for, the business startup phase is usually easy," says Henry J. Turner, executive director of the Small Business Development Center Network at Howard University. "The easiest home businesses to start are janitorial and technological services."

But starting out small doesn't mean it’s cost-free.

"I always recommend a cash-flow analysis for the first 12 months," Turner says. "That will tell the entrepreneur what they need to spend and how much they will need from various sources, such as credit and personal finances."

10 Ripe Areas for Starting Your Business

If you’re hot to get going with a startup, but your finances aren’t, here are some independent businesses – requiring little more than a certificate or license – that you can start today:

1. Tutoring: The last U.S. Census reports more than 76 million school-age children. Federal laws like “No Child Left Behind” and state requirements that students pass tougher standardized tests before moving to the next grade have led to booming demand for tutors.
2. Hair Care/Makeup: Women – and men – spend big money on grooming services. Assisted-living homes, nursing homes and senior centers are great places to get started, and sharpen your skills.
3. Child Care Provider: U.S. Census figures also show that more than 20 million children live in single-parent homes. Many of those working parents need and are looking for childcare – especially outside of regular business hours.
4. Catering: This is a great first step to opening a restaurant. Home-based catering is an inexpensive way to build clientele, test recipes and find out if you're suited for the rigors of food service.
5. Cleaning/Lawn Service: With unemployment low, more people have less time – but more money – to spend on taking care of their homes and lawns.
6. Online Professor: Have an advanced degree or a lot of experience? Selling your services as a virtual instructor can be lucrative. Web-based and traditional colleges and universities offer online courses.
7. Financial Services/Business Consultant: If you know your stuff and have a proven track record, financial planning and/or business consulting can pay big.
8. Party Planning: Kids’ birthday, sweet 16 and graduation parties, bat and bar mitzvahs and other celebrations today involve a lot more than just buying a cake and inviting people over. Besides event planning, other niche opportunities include making invitations, decorations and party favors.
9. Computer Services: Whether you fix the machines, develop software or are able to translate technical jargon into everyday language, this growing field needs experts who make house calls. Many new users, especially older people who once avoided computers, now are giving in to lower prices. This new wave needs help with everything from setting up their new box to using the Web.
10. Personal Organizer: If you have a knack for neatness, you can turn it into money by starting a service to organize anything from closets to computer desktops.

Now take one last tip: Plan carefully.

"Don't start until you have a business plan," Turner says. "The reason a large number of small businesses don’t survive beyond three years is the lack of financial and marketing planning."

What Would Meg Do?

On The Cover forbes Magazine

Ebay's Meg Whitman built a retail leviathan without sacrificing her customers, shareholders or ethics. She still has more to prove.

People at Ebay love to tell this story about Margaret (Meg) Whitman, the chief executive. She was on a flight to India with three other Ebay employees when one of them developed a dangerous gastrointestinal problem somewhere over Tehran. Whitman pulled out an atlas and decided Istanbul was the nearest, safest city in which they could land. She called an air emergency service and arranged for an ambulance to be waiting on the tarmac when the plane landed. Whitman rode in the ambulance with the ill executive and stayed with him for hours in the hospital, talking to his wife on the phone. Once the executive was stabilized Whitman took him to a hospital in London in the corporate jet. She and the other Ebay employees flew commercial to India, leaving the jet for the patient to fly home to California. "She will exert herself personally, far and above the call of duty," says Rajiv Dutta, head of Ebay's PayPal business. "She makes you want to do the right thing."

Whitman is indeed a welcome respite in an age littered with corporate shenanigans. Nice is the word usually applied to Whitman personally, and nice she has been to shareholders. She became chief executive of the online auctioneer in March 1998. Six months later she took the company public at an initial market value of $700 million. Now Ebay is worth $46 billion, and shareholders have enjoyed a compound annual return of 40%. Yet Whitman has taken home a quite reasonable paycheck--averaging $1.7 million a year in the last six years. Of course she is sitting on a nice pot of Ebay stock, most of which she was granted upon her hire--her 1.9% stake is worth some $885 million. That, plus cash and other holdings, makes her one of only ten self-made female billionaires on the planet.

And she did it without indulging in accounting tricks or backdated options, as have so many Silicon Valley executives. "I love who we are as a company and what we stand for," says Whitman. "It's fun to have built such a successful company and done it with a nice character, in a way most people would be proud of."

Whitman's performance earns her a top spot on our annual list of Best Bosses, those who delivered superior returns to shareholders while not gorging on outrageous pay packages. She has built Ebay so that today, with $6.3 billion in revenue, it is becoming a full-service Internet retailer--far more than just an auction site selling Hummel figurines and teeny teapots. Ebay runs a site for apartment hunters, a comparison-shopping bot, a place to sell cars, a handful of regional classified businesses and StubHub, a competitor of Ticketmaster. Ebay also helps 143 million people pay for all those purchases. Last quarter Ebay's PayPal unit processed $11.4 billion of payments between individuals and/or businesses. Nearly 200 million people use Ebay's Skype Internet phone service.

Says Whitman, "I'm a better leader, a better manager, a better executive than when I arrived as a youngster. I have learned how to manage a company that reinvents itself every couple of years."

The next reinvention may be the most critical she will face. From 2000 to 2004 Ebay's revenue rose an average 77% a year. But revenue in the first quarter of 2007 was up just 27%. Her quandary: The company's core business, its Ebay marketplace, is lagging. New listings in the U.S. this past quarter were down 2%. Some of that can be attributed to Whitman's recent efforts to improve the quality and profitability of those listings, but the slackening growth hints at saturation.

Buyers and sellers today have options that were not available when Whitman joined Ebay. Yahoo (nasdaq: YHOO - news - people ) now has a more comprehensive retail offering, which includes a place to sell cars online, as well as shopping, real estate and classifieds. Amazon (nasdaq: AMZN - news - people ), no more than a discount bookseller in the late 1990s, now sells everything from iPods to Prada pumps. Google (nasdaq: GOOG - news - people ) lets people and businesses buy ads or sell wares such as motorcycle helmets and Hello Kitty boots for free, and its Checkout service is chasing down PayPal.

Ebay has $3.5 billion in cash, feeding rumors of acquisitions or mergers to reinvigorate growth. Travel sites such as Expedia (nasdaq: EXPE - news - people ) or Priceline could be targets, as might Monster Worldwide (nasdaq: MNST - news - people ) or Autobytel (nasdaq: ABTL - news - people ). A megamerger is also a possibility. Over the years a bevy of corporate beaux including AOL, Yahoo and Microsoft (nasdaq: MSFT - news - people ) have reportedly come courting, but Whitman has sent them all away. An Ebay spokesperson said the company "will continue to be opportunistic with acquisitions."

Whitman, 50, was born in Oyster Bay, N.Y. and raised in Cold Spring Harbor, both quaint towns on the North Shore of Long Island. The youngest of three siblings, she earned a bachelor's in economics from Princeton and a master's in business from Harvard. In 1980 she married a brain surgeon; they have two boys, ages 22 and 18.

She did a quick stint at Procter & Gamble (nyse: PG - news - people ) before current Republican presidential contender Mitt Romney hired her as a consultant at Bain & Co. After eight years of telling executives how to manage their brands, Whitman moved on to management roles at Disney, Stride Rite, FTD and Hasbro (nyse: HAS - news - people ) before joining Ebay in 1998, then with 40 employees. The company delivered $47 million in revenue that year. David Beirne, an executive recruiter and partner at Benchmark Capital, an early backer of Ebay, called Whitman to lure her to California. At first she said no, but when she met founder Pierre Omidyar and then president Jeffrey Skoll she saw something special. "The connection between the company and its users was something I had rarely seen," she says.

During the first five years of her tenure she focused on expanding the auction business, then acquiring and building PayPal (bought in 2002 for $1.5 billion). Shareholders were thrilled with the company's trajectory. Ebay shares continued to soar in 2004 as Whitman made a big push into new global markets. She brought Ebay to Malaysia and the Philippines, and purchased online marketplaces in India, the Netherlands, South Korea and Germany. That same year she also picked up a 25% stake in classifieds site Craigslist.

At the close of 2004 Ebay's stock reached a split-adjusted alltime high of $58 a share. But in January 2005 Ebay announced the first quarter in which its revenue rose less than 50% over the year prior. Investors took it as a bad sign and pummeled the shares.

In a desperate effort to bring in new business opportunities, nine months later Whitman paid $2.6 billion for Skype, a Luxembourg Internet phone company. Wall Street thought she overpaid for an asset with no obvious revenue plan. Some board members initially raised concerns, too, that the deal was both expensive and potentially distracting. The board eventually acquiesced but, says director Robert Kagle, a partner at Benchmark Capital, "Meg definitely led the Skype acquisition, there's no doubt about that. There were lots of important and challenging issues."

Skype remains a work in progress, delivering only $240 million in revenue in the past 12 months--a measly $1.20 per user. Though analysts have written down the asset, Whitman insists Skype will prove to be a good deal. "PayPal is a fabulous company, but it took a number of years," she points out. (PayPal contributed $1.5 billion in revenue in the past 12 months.) Whitman hopes Skype calls will be used to conduct business, such as someone in Beijing teaching an American to speak Mandarin. "When the cost of telecom goes to nothing a lot of interesting things happen and new businesses can be built," says Whitman.

Last year Whitman gave William Cobb, president of Ebay North America, an edict to fix the auction marketplace. It turns out many buyers were turned off by bad listings. They would think they scored a digital camera for $1, for example, only to learn they owed $300 in shipping fees. Ebay now exposes the full cost in search results. To reduce fraud, Ebay now requires more information from sellers posting items favored by counterfeiters, and hides the identity of bidders so they do not get targeted by fake "second chance" offers.

Whitman is also building Ebay's global classifieds businesses. This should help bring in new customers who do not like the auction format, as well as help Ebay make money from people buying and selling services, such as hiring a lawyer, a plumber or a nanny, which cannot be closed over the Web because they require face-to-face meetings.

In Asia Ebay has been crushed by Taobao, a Chinese online marketplace owned by Alibaba. Yahoo owns 40% of Alibaba--and that's just one reason some on Wall Street have again been talking up an Ebay-Yahoo deal.

Bear Stearns (nyse: BSC - news - people ) analyst Robert Peck ticks off potential synergies: "Yahoo has advertising, Ebay has a marketplace. Ebay has Skype, which Yahoo could use for its click-to-call and [instant messaging] services. Ebay also has a checkout platform [PayPal] that could be used with advertising."

It's a measure of Ebay's growth--and Yahoo's shakiness--that Ebay is now seen as the potential acquirer, reversing the scenario of past rumors. Yahoo's capitalization, $38 billion, is 20% below Ebay's.

Another possibility for Ebay: a future without Meg Whitman. In 2005 Whitman was rumored to have been considered for the top job at Disney but turned it down. "Meg is on everyone's target list," says Kenneth Virnig, a recruiter in Silicon Valley. She may also be tempted toward politics. Whitman is cochairman of Romney's finance efforts, a path that could lead to a cabinet spot. "People are convinced that I must have something going for me if I have Meg Whitman with me," says Romney.

Kagle's take: "Meg is very committed to leaving a legacy at Ebay that clearly demonstrates it has been one of the biggest business successes over the last decade." The legacy-building period is not over yet.

Cell phone tracking locates heart recipient

Police located a 10-year-old boy awaiting a heart transplant by asking his mother's cellular provider to locate her cell phone.

John Paul May of Harrisville had the successful surgery at Children's Hospital of Pittsburgh on Saturday night, but came dangerously close to being passed over for the donor heart until police tracked down the boy and his mother at a jazz festival.

The hospital called state police Saturday afternoon because officials couldn't reach the boy's parents to let them know a donor heart had been found. When police couldn't find the boy or reach him by phone, they contacted Sprint Nextel Corp. to get the coordinates of his mother's cell phone.

"The only time you can use it is life or death, or to track someone wanted in a homicide," state police Cpl. James Green said. Otherwise, police must get a warrant from a judge.

Using the coordinates, state police tracked the phone to a Slippery Rock University building. Police stopped the jazz concert that was happening and announced they were looking for the boy and his mother, Sue.

The crowd of some 500 jumped to their feet and gave the boy a standing ovation as he left, said Steve Hawk, a music professor who conducted the concert.

"I've been in the entertainment business for 30 years and never had such an emotional, shocking event happen at something live," Hawk told the Butler Eagle.

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