Johnson said Microsoft was "committed to earning a bigger slice of that market opportunity" with the acquisition, but some analysts expressed surprise at the richness of the price.

Prudential Securities analysts John McPeake said in a note to investors that the deal "looks expensive" and that it wasn't clear why Microsoft would want to have a business that sent traffic to competitors, such as Yahoo and Google. "It just doesn't feel like it is in their DNA," he said.

But with rival Google now in control of DoubleClick - a major server of online ads - many industry experts believe it was imperative that Microsoft get in the market if it wanted to have any kind of scale in online advertising.

Sid Parakh, an analyst with McAdams Wright Ragen based in Seattle, described it as a good fit. "They needed to buy a company like aQuantive, that was not a question," Parakh said. "Did they overpay for it? Only time will tell."

The deal came just one day after advertising conglomerate WPP Group PLC acquired another online ad company, 24/7 Real Media Inc., for $649 million.

Yahoo made its move last month, agreeing to buy the portion of privately-held online ad exchange Right Media Inc. that it didn't already own for $680 million. In January, advertising conglomerate Publicis Groupe purchased the online advertising company Digitas.

aQuantive is the largest acquisition in Microsoft's history, but it won't be a big financial hit for the massive software company, which reported $28 billion of cash on its balance sheet for the quarter ending in March.

Shares of aQuantive jumped $27.92 or 78 percent to $63.79, while Microsoft shares slipped 15 cents to $30.83.

ValueClick Inc. - which runs an online advertising network along the lines of 24/7 Real Media - is now one of the last publicly traded companies of scale in the sector.

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