Facebook Announces Atlas Solutions Acquisition From Microsoft

Deal improves social network’s attribution capabilities

Facebook's muchreported plan to acquire Microsoft's Atlas ad server is finally a go. On Thursday the companies announced the acquisition agreement.

However, a number of industry veterans have questioned the buy, pointing to Atlas’s subpar technology compared to Google’s market-dominant DoubleClick ad server. Facebook’s director of product marketing Brian Boland acknowledged as much in a blog post announcing the deal.

“We plan to improve Atlas' capabilities by investing in scaling its back-end measurement systems and enhancing its current suite of advertiser tools on desktop and mobile,” Boland wrote. “We will also work to improve the user interface and functionality with the goal of making Atlas the most effective, intuitive, and powerful ad serving, management and measurement platform in the industry. Ultimately, Atlas’s powerful platform, combined with Nielsen and Datalogix, will help advertisers close the loop and compare their Facebook campaigns to the rest of their ad spend across the Web on desktop and mobile.”

Digilant CEO Edward Montes cited the attribution play as the deal’s real value for Facebook. “When the deal was first rumored, everyone pointed to the external ad network idea. But if you took a closer look [at their technology], they lack this user attribution, a notion of measurement and how to pay off display advertising more,” he said. Atlas’s technology will make “everything they do in display ads have less friction” and give them the ability to “actually put the value on an ad beyond click-based values,” he said.

The deal further pits Facebook as Google’s foremost competitor in the online ad game. Google led Facebook in U.S. online display revenue last year with $14.98 billion, or 15.4 percent share of the market to Facebook’s 14.4 percent, according to eMarketer. The research firm estimates that this year Google’s U.S. display revenue growth will outpace the social network’s—climbing by 18 percent compared to Facebook’s projected 15.2 percent increase.

“Facebook's acquisition makes a lot of sense for Facebook," said Karstein Weide, vp of digital media and entertainment at analysis firm IDC. "It’s their next big step to building an ad technology stack that will eventually compete with those of Google and Adobe. They needed a great ad server they control, and Atlas gives them that, and fast. This will make Google's future much less comfy.” 

All Things D and Business Insider had first reported the acquisition being discussed back in December. Advertising Age had previously reported that ad exchange AppNexus had been in talks to buy the ad server.

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