WPP deal is latest in scramble for online advertising

Microsoft loses out on another potential purchase

Microsoft has lost yet another bidding war

Advertising group WPP has paid $637m (£322m) to purchase loss making web advertising broker 24/7 Real Media.

The acquisition is the latest in the scramble of internet giants and advertising companies positioning themselves online following Google's acquisition of DoubleClick for $3.1bn (£1.57bn) and Microsoft's consideration of buying Yahoo .

This is the latest deal in which Microsoft has lost out, failing to acquire DoubleClick, Yahoo, or Real Media, all areas of interest. Despite ongoing intent to reposition itself online, the software giant is not used to such speculative acquisitions.

Financial analysts estimate that WPP paid about 31 times what the company was forecast to fetch. Google paid an estimated 52 times the predicted value of DoubleClick.

Today WPP said the cash purchase of 24/7 Real Media would improve its position in search marketing and digital media.

'Our clients and therefore our industry are becoming more media and technology driven,' said Sir Martin Sorrell, the WPP chief executive.

'24/7 Real Media significantly enhances our capabilities, technological resources and talent, as well as adding to our geographic coverage and our measurable skills.'

WPP says online advertising would exceed $33bn in 2007, or more than eight per cent of global advertising spend.

The 24/7 Real Media businesses will continue to be run by its existing management within WPP, as part of WPP Digital.

24/7 Real Media is based in New York and operates in 12 countries in North America, Europe and Asia-Pacific. It was founded in 1995 and employs more than 400 people.

The acquisition of 24/7 Real Media comes after Sorrell raised concerns over Google's purchase of Double Click.

'I think the Double Click acquisition clearly raises some regulatory issues which a number of media owners, publishers and competitors like Microsoft are very exercised about,' he said.