About Facilitate Digital

Microsoft buy puts locals in frame
22 May 2007

 

LOCAL online advertising technology company Facilitate Digital may soon be fielding offers from global internet giants amid a growing frenzy of acquisition activity in the booming sector.

 

Shares in the group jumped 12 per cent yesterday after Microsoft paid $US6 billion ($7 billion) for ad-serving group Aquantive at the weekend.

 

Facilitate ran a similar business, which was now expanding out of Australian and into global markets, the company's chief executive, Ian Lowe, said.

 

"This financial year about 15 per cent of our business will be offshore and next financial year that will be closer to 40 per cent, with most of that increase coming from Europe and Asia," Mr Lowe said.

 

The Google/Double Click deal had sent the global internet business into a fresh round of deal frenzy, Mr Lowe said.

 

"We've been approached by media agencies at a global management level who are deeply concerned about the shift away from independents with the global technology companies buying up software platforms," he added.

 

"They want to talk with independent players such as ourselves about the opportunities for collaboration.

 

"No one is officially talking to us at this point, but there is a lot of market movement," Mr Lowe said. "We're not fishing and we value our independence."

 

Microsoft's purchase follows the landmark deal last month when the world's biggest digital media player, Google, paid $US3.1 billion for Double Click, and last week's $US647 million purchase of 24/7 Real Media by advertising behemoth WPP.

 

Microsoft is reported to have lost out in auctions for both companies.

Aquantive was the biggest ever acquisition for the world's biggest software group, dwarfing its 2001 purchase of small business software company Great Plains.

Mr Lowe said that in the Australian market for the media agency channel, Facilitate had a 10 per cent market share in 2003 and today it had a market share of 70 per cent.

 

"The market share we have established has been derived principally from Double Click," he said.

 

"Our business has growth in line with the market anywhere from 40 per cent to 80 per cent."

 

So far Facilitate has not released any financial information after last month completing a backdoor stock market listing through mining company Puris Energy.

 

Facilitate shares were up 5c to 40c yesterday, giving the company a market value of $37 million.

 

By Michael Sainsbury
© The Australian
www.theaustralian.news.com.au

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