Microsoft has acquired Net advertising firm Linkexchange to expand its MSN portal site?s small business services.
Bought for $250 million, Linkexchange provides online marketing services to Web site owners and small businesses. Members of its service, Banner Network, can place their online ads free on other members' sites, offering free space on their own sites in return. Linkexchange places banner ads on more than 40,000 sites, some very small, and makes money through sponsor advertisers.
Microsoft said it will incorporate Linkexchange into MSN to allow it to reach more customers and offer a full suite of online marketing solutions for small and medium-sized businesses on the Web.
?MSN is committed to being an important ally for every small business online, and with this acquisition MSN can bring small business customers excellent online marketing tools,? said Laura Jennings, vice president of MSN. ?We are also able to expand the MSN network to include the hundreds of thousands of high quality smaller sites in the Linkexchange network, which represent the heart of the Web.?
The deal is part of portal sites? continuing drive to add more features and services to attract more visitors.
?This purchase is part of an overall trend of the portal sites finally leaning toward commerce and direct marketing services - the only area left for differentiation at this point,? said Melissa Bane, an analyst at the Yankee Group.
?There is also a mad scramble going on to target the small, local business for ecommerce services," she added. "Yahoo?s acquisition of Viaweb gave them a strong lead in that space, but the other sites are quickly purchasing or building their own solutions to catch up.?
Earlier this year Excite bought another advertising network, Matchlogic, while Yahoo bought Viaweb.
As part of the #250 million deal, Microsoft also gets Merchant Planet, which offers commerce site services to small merchants. It would make sense for MSN to integrate this with its newly relaunched Sidewalk service to attract local merchant business.
?This kind of service will compete directly with Yahoo! Store,? said Bane. ?I expect local Internet commerce to really finally take off in 1999 - and with the portals aggressively moving in that area, it?s likely to grow at a dramatic rate.?
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