Microsoft to buy Rapt, confers with Yahoo execs

Microsoft hasn’t yet snagged Yahoo, but it plans to acquire another company it hopes will boost its online advertising yields: Rapt, of San Francisco.
Rapt sells advertising yield management tools for online media companies. The tools are designed to predict demand for advertising and optimize the price and placement of ads, improving revenue.

Microsoft plans to incorporate Rapt’s tools and consultancy business into its Atlas Publisher Suite. That will allow it to offer publishers an integrated service to manage advertising sales, it said.

Microsoft obtained Atlas as part of its acquisition of aQuantive for US$6 billion last May. It did not say how much it will pay for Rapt.

Rapt already counts a number of online services among its customers, including Microsoft, Expedia, Dow Jones and The New York Times, according to Microsoft.

One Rapt customer Microsoft forgot to mention is Yahoo, which has used Rapt’s Price Director software in the U.S. since 2004, and worldwide from October 2005, according to Rapt.

Yahoo executives reportedly met with Microsoft representatives Monday to explore Microsoft’s unsolicited $44.6 billion bid for the company.

If that deal goes ahead, the companies’ work with Rapt may help them integrate systems, but if it fails, Microsoft’s control of Rapt’s yield-improvement technology could hurt the profitability of Yahoo’s online advertising model.

Rapt was exploring one other partnership that Microsoft might put a stop to: In December, Rapt said it was in talks with DoubleClick, now part of Google, about a possible integration of their advertising management systems.

Meanwhile, Microsoft and Yahoo executives met for the first time last week to discuss Microsoft’s initial $44.6 billion cash and stock bid for the company, the Wall Street Journal reported on Thursday.

The meeting is the first since Microsoft made the unsolicited offer on Jan. 31, and gave Microsoft a chance to pitch its vision of the future of the two companies. Yahoo rejected the initial offer last month, saying it was too low.

The meeting included several executives from both companies but was not a negotiation and no investment bankers attended, the report said. No further talks have been scheduled.

The report said it wasn’t immediately clear if the CEO’s of either company attended the meeting.

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