AQuantive Basks in Online Ad Resurgence

Someday, the vast bulk of advertising will involve digital technology. And if aQuantive(AQNT Quote) has its way, it will stand at the center of the digital advertising industry. But it will have to fight off a lot of competitors en route.

AQuantive was originally "Avenue A," an online-advertising play that saw its stock soar as high as $89 in early 2000. After spending a few months treading below $1 a share in 2000, Avenue A slowly recovered, retooling itself out of its faith that the online advertising market would rebound stronger than ever.

As anyone with even a dial-up connection knows, the market did come back. Avenue A doubled down, buying a number of companies such as SBI.Razorfish, MediaBrokers, iFrontier and NetConversions along the way to give it a broader range of services that include media buying and helping companies improve Web site designs and ad placements in Internet searches.

The result of the buying binge was united earlier this year under the new brand, aQuantive. "We've built this piece by piece," says aQuantive CEO Brian McAndrews. "The acquisitions allowed us to have the full capability of outbound marketing, which gets people to client sites, and inbound marketing, which keeps people there."

Although the stock rose modestly amid general expectations of a recovery in online advertising, it wasn't until early May, when the company reported blowout earnings, that the stock took off. It's since risen as high as $16 on Monday, its highest level since June 2000. In the first quarter, aQuantive posted 9 cents a share, up from 6 cents a year before, and nearly double the 5 cents analysts had expected.

Analysts have since paid a bit more attention to the stock. And investors have gone from looking at it as a stock that simply rides on Google's(GOOG Quote) coattails to a company that may just make good on its promise to become the first big one-stop ad agency focusing on the Internet.