Microsoft Buys Navic Networks

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Microsoft is acquiring Navic Networks for an undisclosed sum, adding interactive TV technology to its portfolio as the cable industry gears up its own advanced-advertising venture.

Navic’s technology provides addressable advertising and interactive television applications on more than 35 million digital set-top boxes in North America.

MSOs using the Navic platform include Comcast, Cox Communications, Time Warner Cable, Charter Communications and Canada’s Videotron.

“Navic is a great trophy in this suite of offerings in terms of digital TV,” said Scott Ferris, general manager of Microsoft’s Advertiser and Publisher Solutions group. “It’s a filling-out of our offering for addressable advertising.”

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’s acquisition of Navic comes as the six biggest MSOs have formed Canoe Ventures LLC, which aims to establish standards and provide services for interactive and addressable advertising virtually nationwide.

Ferris said Microsoft’s goal—like Canoe’s—is to establish a scalable, national advertising platform.

“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,” he said.

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.

Navic, which has 110 employees, raised $43 million in funding from investors that include Pilot House Associates, Highland Capital Partners, Himalaya Capital Ventures and Pequot Ventures.

Navic’s technologies include campaign management tools that deliver and place targeted interactive television media. The company also operates Admira, a unified ad network for targeting audiences across television advertising inventory.