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Citing sources familiar with the matter, Bloomberg reported that Microsoft is likely to pay $1 billion for the Xandr acquisition. Microsoft has not specified any time duration for the completion of the buyout, which is subject to regulatory and customary conditions.
Xandr is the first-tier associate of AT&T and is the company’s worldwide programmatic advertising marketplace platform for premium digital advertising. Xandr’s data-powered platform provides targeted advertising services leveraging data insights.
However, the Xandr buyout transaction will not include advertising sales business supporting DirecTV, noted AT&T.
In 2018, AT&T acquired AppNexus and relaunched it as Xandr the same year. Effective second-quarter 2020, the company had discontinued reporting Xandr as a separate segment and included it within WarnerMedia.
Xandr to Boost Microsoft’s Digital Ad business
With Xandr, Microsoft is looking to bolster its position in the digital ad business in a “post-cookie world”. The tech giant stated that together with Xandr, it intends to pursue an strategy that not only respects consumer privacy preferences but fully comprehends publishers’ interactions with clients and helps advertisers to achieve their targets.
Post the buyout, Microsoft is looking to integrate its audience understanding, technology and worlwide advertising client base with Xandr’s advertising solutions to ramp up the delivery of digital ad solutions for the open web.
Xandr’s technology platforms include Xandr Monetize, Xandr Curate, Xandr Invest and Invest TV, which complement Microsoft’s digital ad solutions, including Microsoft Audience Network, PromoteIQ and Microsoft Customer Experience Platform.
In the last reported quarter, Microsoft’s search and news advertising revenues, excluding traffic acquisition costs (TAC), increased 40% (up 39% at constant currency) on recovery in the advertising market.
For the current quarter, Microsoft expects search and news advertising revenues, excluding TAC, to grow in the low to mid-20% range on improving the advertising market. The company also stated that persistent supply chain disruptions would likely affect ad budgets and dent the performance.
Zacks Rank & Stocks to Consider
At present, Microsoft currently carries a Zacks Rank #3 (Hold).
For Arrow Electronics, the Zacks Consensus Estimate for 2021 earnings is pegged at $14.60 per share, up 8.1% in the past 60 days. The long-term earnings growth rate of the company is pegged at 27.4%.
Arrow Electronics’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 18.6%. Shares of the company have rallied 30.6% year to date.
The Zacks Consensus Estimate for Alphabet’s 2021 earnings is pegged at $108.29 per share, up 6.3% in the past 60 days. The long-term earnings growth rate of the company is pegged at 25.8%.
Alphabet’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 41.5%. Shares of the company have surged 63.7% year to date.
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Microsoft (MSFT) to Acquire AT&T's Xandr Advertising Platform
In a blog post, Microsoft (MSFT - Free Report) recently announced its intent to acquire AT&T’s (T - Free Report) Xandr unit for undisclosed financial terms.
Citing sources familiar with the matter, Bloomberg reported that Microsoft is likely to pay $1 billion for the Xandr acquisition. Microsoft has not specified any time duration for the completion of the buyout, which is subject to regulatory and customary conditions.
Xandr is the first-tier associate of AT&T and is the company’s worldwide programmatic advertising marketplace platform for premium digital advertising. Xandr’s data-powered platform provides targeted advertising services leveraging data insights.
However, the Xandr buyout transaction will not include advertising sales business supporting DirecTV, noted AT&T.
Microsoft Corporation Price and Consensus
Microsoft Corporation price-consensus-chart | Microsoft Corporation Quote
In 2018, AT&T acquired AppNexus and relaunched it as Xandr the same year. Effective second-quarter 2020, the company had discontinued reporting Xandr as a separate segment and included it within WarnerMedia.
Xandr to Boost Microsoft’s Digital Ad business
With Xandr, Microsoft is looking to bolster its position in the digital ad business in a “post-cookie world”. The tech giant stated that together with Xandr, it intends to pursue an strategy that not only respects consumer privacy preferences but fully comprehends publishers’ interactions with clients and helps advertisers to achieve their targets.
Post the buyout, Microsoft is looking to integrate its audience understanding, technology and worlwide advertising client base with Xandr’s advertising solutions to ramp up the delivery of digital ad solutions for the open web.
Xandr’s technology platforms include Xandr Monetize, Xandr Curate, Xandr Invest and Invest TV, which complement Microsoft’s digital ad solutions, including Microsoft Audience Network, PromoteIQ and Microsoft Customer Experience Platform.
In the last reported quarter, Microsoft’s search and news advertising revenues, excluding traffic acquisition costs (TAC), increased 40% (up 39% at constant currency) on recovery in the advertising market.
For the current quarter, Microsoft expects search and news advertising revenues, excluding TAC, to grow in the low to mid-20% range on improving the advertising market. The company also stated that persistent supply chain disruptions would likely affect ad budgets and dent the performance.
Zacks Rank & Stocks to Consider
At present, Microsoft currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector include Arrow Electronics (ARW - Free Report) and Alphabet (GOOGL - Free Report) . Both the stocks sport a Zacks Rank #1 (Strong Buy), You can see the complete list of today’s Zacks #1 Rank stocks here.
For Arrow Electronics, the Zacks Consensus Estimate for 2021 earnings is pegged at $14.60 per share, up 8.1% in the past 60 days. The long-term earnings growth rate of the company is pegged at 27.4%.
Arrow Electronics’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 18.6%. Shares of the company have rallied 30.6% year to date.
The Zacks Consensus Estimate for Alphabet’s 2021 earnings is pegged at $108.29 per share, up 6.3% in the past 60 days. The long-term earnings growth rate of the company is pegged at 25.8%.
Alphabet’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 41.5%. Shares of the company have surged 63.7% year to date.