Analysis: Microsoft loss reflects Web display ad world’s woes


SAN FRANCISCO (Reuters) – Microsoft Corp shelled out a record $6.3 billion for aQuantive in 2007 at the height of a race with Google Inc and Yahoo Inc to clinch the top spot in Internet display advertising, betting on what many thought was a red-hot business. The writedown of almost all of that deal's value, announced this week, shows how misguided those expectations were, and how brutal the once-thriving business of selling banner ads on websites has become. The main culprit is an explosion of advertising space offered by Facebook Inc and other websites that is outpacing steady demand. …

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