Microsoft made its largest acquisition yesterday when it joined the rush for online advertising by buying aQuantive for $6 billion (£3 billion).

The world’s largest software company, which has missed out on several key online deals in recent months, agreed to pay $66.50 a share for aQuantive, an 85 per cent premium on the group’s closing price on Thursday. AQuantive will give Microsoft its first meaningful footprint in auction sales of online display, or banner, advertising.

A source close to the deal said: “That’s it – the consolidation in this space is done. There are no quality assets left. Microsoft was willing to pay up because it’s a lot easier than building their own software.”

The all-cash deal was the latest in a one-month consolidation spree that has swept the internet advertising sector, sparked by Google’s acquisition of DoubleClick, the largest broker of display ads, for $3.1 billion. Yahoo!, the embattled leader in online display advertising, responded by buying for $680 million the 80 per cent of Right Media that it did not already own.

Right Media specialises in placing ads on smaller sites, particularly user-generated, social network-style web pages. WPP Group, the world’s second-largest advertising services group, agreed this week to buy 24/7 Real Media for $649 million. In December, Publicis, the French advertising giant, bought Digitas, a leading online ad agency, for $1.3 billion.

Microsoft, which is sitting on a cash pile of approximately $30 billion, has made about 40 acquisitions in 18 months. It defended the $6 billion purchase of aQuantive by citing the prospects for online advertising. Microsoft, which was advised by Lazard, plans to tap into the market through services such as internet TV via its new Vista operating system.

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