Peter Kafka

Recent Posts by Peter Kafka

Sold! (Finally) Facebook Takes Atlas From Microsoft, So It Can Get Serious About Ads.

The Web ad world’s most poorly kept secret is finally out in the open: Facebook has bought Microsoft’s Atlas ad serving and tracking business, an important step as the social network gets more ambitious about its $4 billion ad business.

No terms disclosed, but earlier this month AdAge pegged the price at below $100 million.

Microsoft got Atlas as part of its $6.2 billion aQuantive buy, and it has been selling off that one in parts, at fire-sale prices, for years; last summer it took a write-down on the entire thing.

Ever since Kara Swisher reported the sales talks back in December, two competing narratives have sprung up around the deal: Either Facebook was buying Atlas to help build out its ad network, or Facebook was buying Atlas to help build up its internal business.

Educated guess: Both versions are correct.

The theory, advanced to me by smart folks who have some skin in the game: Facebook’s plan is to use Atlas’ data tracking abilities on sites outside of Facebook to prove the value of the ads it runs on its site right now, which will give them the ability to increase ad pricing. Once Facebook’s ads can generate the same kind of pricing that Google commands, Facebook can finally head out to other sites and compete for the ad dollars they’re currently handing to Larry Page and company.

In any case, that won’t happen in the near future. Integrating and overhauling Atlas, which was essentially abandoned by Microsoft years ago, will take many months, and the whole thing may not be done for another year. After that, don’t be surprised if Facebook tries selling you an ad on a site they don’t own.


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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik