Like Moths To Flame? Microsoft Acquires Firefly, Web Agent Leader

For all the huffing and puffing going on about Microsoft, one thing is
certain–it’s not afraid of acquiring Internet pioneers. The latest dip in
the perpetual deal pool has them snagging Firefly for what we estimate
could be as high as $250 million to $300 million.

Firefly’s software technology works in the background matching user
interests to information and products they may be interested in based on
profiling technology. A marketer, for example, if you have a Firefly
‘Passport,’ may be able to tell that you like stocks, hiking, and
reading–but without having to know your name, address and other personal
details.

Selling you something doesn’t require that kind of personal info–it requires
knowing what you like or are interested in, and even the Web sites you’ve
been to.

Cambridge, MA-based Firefly will move to the rainy skies of Seattle to
participate in the frenzy. The deal follows Microsoft’s string of buys in
its post-interactive TV era beginning in 1995 when Bill Gates discovered
that perhaps 100 million people on the planet would rather use e-mail than
watch
video on demand.

Other companies Microsoft has snatched up in its quest for a full Internet
suite of offerings include:

One thing is clear here, Microsoft certainly puts its money where its
mouth is. In December 1995, Gates gathered the geeks in Redmond for his
now-famous proclamation that Microsoft is an Internet company, too. Some
$100 billion market capitalization later it certainly is.

We estimate the above deals combined total more than $4 billion. But on the
way they’ve allowed Microsoft to jump start its presence in a wide range of
Internet offerings ranging from content to software and commerce to services.

The one observation that we can make here that seems appropriate–despite
all the anti-trust concerns, the market share battles, the gesturing and
posturing–is that at the end of the day Microsoft is doing more deals than
anyone in this space. What’s stopping its rivals from acquiring these
firms? Cash, stock, what?

Any one of its rivals could be just as aggressive or more aggressive in
this space, but they seem to be letting Microsoft do all the shopping
itself to establish a future position at the apex of the Internet. That
could be the biggest strategic mistake Microsoft’s rivals make for the next
decade.