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Advertising - Thursday, July 26, 2007

Microsoft Closes Out ADecn Buyout To Get Ad Exchange

We had reported last May from one of our valued moles that Microsoft's M&A team had made a pitstop in Santa Barbara to meet with ad exchange ADecn before traveling on to France to close its buyout of mobile advertising's Screentonic.

ADecn had raised $5.5M in venture capital funding and had built one of the few marketplaces or exchanges for online advertising, alongside Right Media (Yahoo) and ContextWeb's Adsdaq. The deal with Microsoft is remarkable in that it shows how quickly the concept of an ad exchange went from launch to total buy-in from the bigs. Turnover at these companies was not terribly large but the bigs evidently agree with the logic of the ad exchange.

ADecn differentiates itself by connecting ad networks with publishers. In contrast, Right Media is more about connecting publisher ad inventory directly with publishers. Both models make sense.

ADecn's seed funding was $2.4M led by Khalda Development was our original investor. Its Series A came from Novus, Labrador, Tech Coast Angels and the Band of Angels. It closed in February at $3.1M.

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