Microsoft's Rapt on Google

The software giant answers Google's Ad Manager launch by buying digital ad management specialist Rapt.

One day after Google launched a test flight of a free ad-serving tool, Microsoft agreed to acquire Rapt, which makes advertising yield management software for online publishers.

Terms of the deal were not made public. Microsoft officials March 14 said they will fold Rapt's technology and information and advisory services into the Atlas Publisher Suite the software maker cultivated from its $6 billion purchase of aQuantive last year.

With Rapt, Microsoft will now be able to offer customers much of the technology Google offers its customers from its $3.1 billion purchase of DoubleClick, including asset and inventory management, forecasting, yield and sales management, and ad delivery and operations.

Microsoft also forecast a specific product from the Rapt-Atlas marriage: The company said in a statement it will blend Rapt's ad planning capabilities and Atlas' ad campaign management tools to whip up a publisher sales workflow service.

In a shot across the bow of Google's DoubleClick offerings, Microsoft said that "this solution will improve upon the existing industry offerings for publishers' sales teams when used with Rapt's existing pricing analytics, inventory management and business intelligence products on top of Atlas' ad serving platform."

The combination of Atlas and Rapt gives Microsoft inroads into more than half of the top 25 U.S. publishers, including CNET Networks, Dow Jones & Company, Expedia, Fox Interactive Media, Microsoft, MTV Networks, NBC Universal, The New York Times Company, Reuters, USA Today and Yahoo.

Microsoft's bid for Rapt follows Google's release of Ad Manager, a free software service that lets Web publishers sell ads and monitor how well they do.

Coincidental or not, the release of Google Ad Manager and Microsoft's purchase of Rapt offer a snapshot of the online ad war in 2008. Google and Microsoft are both refining their respective DoubleClick and aQuantive ad-serving platforms and can measure their performance to better target ads for consumers.

Google and Microsoft are expected to extend their ad-serving tendrils deeper into the mobile ad and social network ad markets, fields that are extremely green and ripe for growth.

Google is the online ad market leader but many analysts believe Microsoft could make a dent in Google's fortress if it makes the right moves in mobile and social ads in the next few years, particularly if the desktop software power succeeds in buying Yahoo.

The Wall Street Journal and other publications are reporting that Yahoo and Microsoft met this week for informal talks about a tie-up, a $40 billion-plus merger that would be the biggest deal the Internet sector has seen to date.