The web is awash with news stories about Microsoft's acquisition of a 1.6% stake in Facebook. I was intrigued by Don Dodge's post on the subject which noted that this is "setting a tone for the company, and sending a strong message to advertisers, publishers, employees, and investors, that Microsoft is serious about being a leader in on line media." Given that my last post highlighted Microsoft's acquisitions in fiscal 2006 I was curious to sift back through these deals to see what sort of tone a company's acquisitions set? The chart below shows acquisitions by Microsoft, Google, and Yahoo from July 2006 to June 2007. To add some context I've colour coded these based on a rough sector classification.



One clear theme from this list is the importance of advertising. aQuantive and Rightmedia were two headline deals but ScreenTonic, Adscape, and AdInterax reinforce the notion that advertising is critical to all three.

Google's acquisitions were arguably the most diverse, although this reflects their scattered product offerings. Also, these companies were operating in common consumer spaces such as photos (Neven Vision and Panoramio), mapping (Endoxon), collaboration (Jotspot), video (Youtube and possibly Marratech for video conferencing), peer to peer file sharing (Xunlei), and presentation software (Tonic Systems and Zenter). Yahoo had half as many acquisitions and they seemed to be more focused on content than technology. Companies like rivals.com (sport site), wretch (a Xanga equivalent from Taiwan), and Bix.com (American Idol on the web) appear to be aimed at purchasing audiences. This seems reasonable in a world where advertising is incredibly valuable.

Microsoft's acquisitions look very different in comparison. With the exception of health-focused Azzyxi and Medstory, their other purchases generally aim to improve enterprise software experiences. Given the investment of their existing corporate customer base, it's no surprise that they're spending money to alleviate that pain.

Returning to the original question though, it certainly doesn't look like Microsoft is gunning to become an industry leader in online media. While the above analysis does stop at June 07 and they subsequently acquired AdEcn (advertising platform), Parlano (collaboration), Jellyfish (shopping comparison) and Facebook, I'm very curious to see what will be next in their shopping cart.