Microsoft Outpaddles Canoe With a $230M Deal for Navic6/20/2008 8:00 PM Eastern
Microsoft swooped into interactive TV with its acquisition last week of Navic Networks, as the cable industry gears up its own advanced-advertising venture.
And the software goliath apparently wanted Navic more than the six biggest cable operators did.
The MSOs that formed Canoe Ventures LLC were bidding for interactive TV vendor Navic Networks before Microsoft won the deal for about $230 million, according to an industry executive.
Canoe's backers — Comcast, Cox Communications, Time Warner Cable, Charter Communications, Cablevision Systems and Bright House Networks — were interested in Navic because that was the “closest to what they wanted on the ad-tracking side,” the executive said.
Microsoft and Navic declined to comment. In announcing the acquisition, Microsoft did not disclose financial terms.
“Navic is a great trophy in this suite of offerings in terms of digital TV,” Scott Ferris, general manager of Microsoft's Advertiser and Publisher Solutions group, said in an interview. “It's a filling out of our offering for addressable advertising.”
Vicki Lins, Comcast Spotlight's senior vice president of marketing and communications who is handling communications for Canoe, would not confirm that the MSO venture was bidding for Navic.
“We're always evaluating technology, vendors and opportunities,” she said. “At this point, we have not made any definitive decisions.”
Ferris, while he did not comment on whether Canoe bid for Navic, said: “We hope to serve all of [Canoe's] needs, or some of their needs, and persuade them we're the best partner to work with.”
Navic's technology is used on more than 35 million digital set-top boxes in North America, with customers that include Comcast, Cox, Time Warner Cable and Charter.
For example, in the Los Angeles area both Time Warner Cable and Charter have widely deployed the Navic system.
“L.A. is kind of a microcosm of what they want Canoe to be,” the industry executive said.
Navic, founded in 2000, will operate as a Microsoft subsidiary in the Advertiser and Publisher Solutions group and remain based in Waltham, Mass.
Microsoft last year acquired online-advertising firm aQuantive for $6 billion in cash, one of whose subsidiaries included Atlas, which provided video-on-demand advertising solutions to cable operators, advertising agencies and media companies.
With the addition of Navic, Ferris said, “we're extending into the linear [television] space, interactive advertising and the TV ad-network space.”
Microsoft eventually plans to tie together the TV advertising capabilities provided by Navic with its online-advertising platforms, Ferris said. “We want to provide agencies and advertisers with a unified dashboard,” he said.