• by Gavin O'Malley  @mp_gavin, July 27, 2007

Investing further in online advertising, Microsoft on Thursday agreed to acquire AdECN, Inc, an ad exchange based near Santa Barbara, Calif. Terms were not disclosed.

AdECN's real-time auction marketplace for buying and selling display advertising is akin to that offered by Right Media, the company Yahoo agreed to buy outright for more than $680 million in April.

"This is good for the whole advertising industry," said Kevin Johnson, president, Platforms and Services Division at Microsoft. "We believe the addition of AdECN to the Microsoft portfolio is a perfect fit and will create more efficiency for the industry by forming a more robust marketplace between advertisers and publishers, aggregating more supply and demand."

Microsoft made its desire to break into online adverting clear in May when it placed a stunning bid to acquire aQuantive, which includes the ad network Atlas, for $6 billion. (Shareholders are scheduled to vote on the deal Aug. 9.)

Also in May, Microsoft said it was acquiring European mobile advertising company ScreenTonic SA in a bid to expand its mobile expertise. ScreenTonic has relationships with some of the largest mobile providers in Belgium, France and the U.K. ScreenTonic currently markets an inventory of 80 million page impressions every month.

Founded in 2003, AdECN brings relevant technologies and domain expertise to the Microsoft team.

"Joining forces with Microsoft will provide the capital and resources to enable AdECN to scale the exchange at a much faster pace, making it more attractive to the advertising networks," said William Urschel, founder and chief executive officer, AdECN.

The acquisition is expected to be completed in the first half of Microsoft's fiscal year 2008. AdECN, which has approximately 30 employees, will continue to operate from its California headquarters as part of Microsoft's Online Services Business.