Microsoft Enters TV Ad Market With Navic Networks

Microsoft Corp., the world’s largest software maker, entered into the world of TV advertising on Wednesday with the acquisition of Navic Networks, a Waltham, Massachusetts-based maker of television advertising technology. Navic makes technology to create interactive ads.

Redmond, Washington- based Microsoft announced in a statement yesterday that it has acquired Navic Networks that uses real-time audience measurement data to improve the delivery and placement of targeted interactive media.

However, it did not disclose terms of its deal with Navic that employs nearly 80 people.

By acquiring TV ad technology company Navic, the software mammoth is stepping up its long-simmering competition with online search powerhouse Google Inc., which is pioneering the TV advertising realm.

Navic, which provides the tools for companies to deliver their ads to the set-top boxes of the subscribers of certain cable providers, will become a subsidiary of Microsoft's growing Advertiser and Publisher Solutions (APS) Group, which is responsible for building Microsoft’s monetization engine to serve the advertiser and publisher community.

Microsoft hopes the acquisition of Navic, which specializes in delivering targeted, interactive ads to users of digital cable set-top boxes, will enable it to work with industry partners to optimize the delivery and placement of Television advertising.

"Television media represents the largest percentage of advertisers and agencies' media budget today," said Brian McAndrews, senior Vice President of the APS Group at Microsoft.

“Navic is a great illustration of the continued investment that Microsoft is making in the TV space,” said APS Group’s general manager Scott Ferris.

According to Navic, its interactive technology currently being used to delivered ads to around 35 million digital set-top boxes in North America.

"Viewers across North America are engaging with relevant advertising and interacting with their TVs in ways never before possible. Joining forces with Microsoft will enable our common vision of addressable television advertising solutions to continue to flourish and better meet the needs of our industry partners," Navic Chief Executive Chet Kanojia said in a statement.

Google has already launched online ad program for placing both radio and TV ads. The platform lets advertisers create TV commercials and choose the networks and times that they air by filling out an online form.

Microsoft, the worldwide leader in software, asserts its combination with TV ad firm Navic will bolster its Internet unit after it dropped a plan to buy Sunnyvale, California-based Yahoo! Inc. The software mammoth walked away from talks to acquire Yahoo for $47.5 billion on May 3.

Last week, the online search company Yahoo rejected a separate Microsoft offer for its search business, opting instead for a search ad pact with Google. On June, 12, Yahoo announced a nonexclusive partnership with Google under which the search engine giant will supply it with some search ads.

According to New York-based research firm EMarketer Inc., in 2007, Google accounted for 28 percent of the $21.1 billion in U.S. online ad spending, while Yahoo took 16 percent, and Microsoft accounted for 6.7 percent.

Microsoft shares dropped 34 cents to $28.46 in NASDAQ Stock Market trading, while Google shares fell $7.08 to $562.38.