The Harsh Light Shines on Microsoft's aQuantive Deal

I wrote about Microsoft's (MSFT) aQuantive (AQNT) deal over the weekend, saying that it made no financial sense. Well, apparently, I have company. Both the infamous Microsoft mole, Mini-Microsoft, and Kevin Kelleher at GigaOM are verbalizing what I think is everyone's astonishment at Microsoft's six billion dollar deal from last Friday. I think Kevin does a nice job of putting this in perspective:

I’ve been trying to find a way to illustrate just how screwy Microsoft’s $6 billion bid for aQuantive is, and here it is: For $6 billion in cash, Microsoft could have hired, in a single day, 60,000 engineers and salespeople (plus managers to make sure they earn their pay) - paying each one of them a $100,000 salary.

Of course, if Microsoft did that in one day everyone would think its executives had gone mad. After all, it already employs a modest 71,000 people around the world. Instead, it’s paying out $2.85 million for each of the 2,106 employees who work for aQuantive.

Combining the two articles, we could go even further down this road of making the $6 billion all-cash deal price concrete: For the same price, Microsoft could have given every employee who now works at Microsoft an E-class Mercedes Benz and had money left over. Alternatively, it could have just given every Microsoft employee a $85,000 bonus. It could have bought Salesforce.com (CRM) outright, which would have certainly put a crimp in the alliance Salesforce is negotiating with Google (GOOG) and would complement Microsoft's existing former-Great Plains Software group nicely. Or, it could have given away 20 million XBox 360s to seed its video game market. Instead, we're going to have more Microsoft-branded banner ads. Oh joy.

Yeah, I think Microsoft might have overpaid for aQuantive a little.