Microsoft to buy Web ad firm aQuantive

By Daisuke Wakabayashi and Eric Auchard

SEATTLE/NEW YORK (Reuters) - Microsoft (MSFT.O) said on Friday it will buy aQuantive AQNT.O for $6 billion (3 billion pounds), paying an 85 percent premium to snap up one of the last large independent companies in a consolidating Web advertising market.

In announcing its biggest acquisition ever, Microsoft has made its most aggressive move to date in trying to narrow the gap with Google (GOOG.O) in the online advertising market.

Microsoft, the world's largest software maker, said it would pay aQuantive shareholders $66.50 a share, a hefty premium to the previous day's closing share price of $35.87.

Shares of aQuantive shot up to $63.76 in midday Nasdaq trade while Microsoft fell 0.84 percent to $30.72.

The all-cash deal tops a $10 billion consolidation spree across the online advertising market, sparked when Google agreed to buy DoubleClick for $3.1 billion last month.

"There had to have been some desperation for Microsoft to pay the price that it did," said Morningstar analyst Toan Tran, adding that Microsoft's sense of urgency probably heightened after it lost out on DoubleClick.

"Sometimes, I am worried that Microsoft has Google tunnel vision. It's so worried what Google is doing that it becomes way too reactionary."

Yahoo (YHOO.O) followed the Google deal by snatching up the 80 percent of Right Media it did not already own for $680 million. On Thursday, WPP Group (WPP.L) said it would acquire 24/7 Real Media TFSM.O for $649 million.