Microsoft buys Multimap to boost advertising strategy

Microsoft purchases online mapping company Multimap to boost online services and advertising revenue.

Microsoft continues to make acquisitions to boost its online services and advertising strategy. Early Wednesday the company said it snapped up Multimap, a UK company that provides online mapping for Europe, North America and Australia.

The companies did not disclose the terms of the deal. Multimap, based in London, will act as a wholly owned subsidiary of Microsoft and employees will be integrated into the company's Virtual Earth and Search teams in its Online Services Group (OSG), Microsoft said.

Multimap has staff in the UK, US and Australia, and Microsoft said it is not sure yet if those employees will stay where they are or move to other offices. The Multimap office in the UK will remain open and employees will continue business as usual there, the company added.

In addition to providing online maps, Multimap also offers location-based services to find local businesses, hotels and restaurants, as well as business services to provide mapping, proximity searching, routing, aerial images with map overlay, and local information to business Web sites.

Microsoft has been looking for ways to boost the value, and thus revenue, of OSG, which oversees MSN and Windows Live. Microsoft hopes to leverage these properties to sell online advertising and generate revenue in this area to compete with Google.

Last week the company said it purchased Seattle startup WebFives, formerly Vizrea, which provides a Web-based file-sharing service for Internet and mobile video, photos, audio, and blogs. Microsoft also made its largest acquisition to date to boost the revenue of OSG with its purchase of aQuantive digital advertising and marketing services firm for US$6 billion earlier this year.

In addition to making acquisitions, Microsoft also has been partnering with online content and service providers to offer online advertising. On Monday, the company announced a deal to be the exclusive provider of display and contextual advertising for CNBC.com, a deal similar to ones it already has in place with Facebook globally and Digg in the US.

All of these efforts are part of a now two-year push to add services and content for its online brands to boost the revenue of its Online Services Business segment. To date, Wall Street analysts have said they are unimpressed by the growth of this segment, and Microsoft's moves seem to be evidence the company is getting that message loud and clear.

Revenue from online services grew only 8.7 percent from US$2.3 million to US$2.5 million for Microsoft's fiscal year 2007, ended June 30. For the company's first quarter 2008, during which the aQuantive deal closed, revenue from OSG was better, up 25 percent year over year. But even Microsoft Chief Financial Officer Chris Liddell acknowledged when first-quarter earnings were revealed that Microsoft would like to see more growth from this business segment.

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