The situation? Microsoft has picked up Aquantive, an end-to-end advertising firm which was birthed just before the first bubble popped in the late nineties for a redmond-ian sum of 6 billion dollars and change.

The issue? Microsoft paid almost 100% more than what Aquantive was valued at. The day before the purchase was anounced.

The explanation: Well, Microsoft has big pockets, there’s no doubt about that. Mat Ingram jokes that they probably make $6 billion every month — I’ll go one further and say that its probably the rough equivalent to what Mr. Gates finds in his cushions every year.

Nevertheless, its not an insignficant sum — why bother paying so much? Is Microsoft *really* that insecure about the online ad race that it would pay such a gi-normous premium in a bidding war for Aquantive?

Well, it might be.

On the other hand, while everyone is either contributing to the cacophony about the purchase, or perhaps, remarking about how desperate Google is, or how this is going to be a year of acquisitions, or in a typically intelligent piece, how we can look to vertically integrated models of advertising now, I think one angle about this purchase is how it speaks to Microsoft’s intended goals for the future.

And that can be found right in an article by cNet who goes one further than most of the conversation by actually going right to Microsoft and Aquantive for a quick interview.

In that interview, there are a few delicious tidbits, most importantly these statements made by Kevin Johnson of Microsoft’s platform and services division:

… we are deeply committed to building a great advertising business. This investment in the monetization capability for our future services is key. They are stronger on the buy side, as you point out, and they have a foundation on the sell side (technology for Web site publishers). As a company we’ve made a strategic bet that we are going to shift more and more things to this concept of software plus service, where we complement our software offerings that run on intelligent devices on the edge of the network with services delivered over the network. Many of those services will be monetized through online advertising.

*my emphasis, ‘natch

With Microsoft’s push to move out Silverlight in recent weeks, coupled with the purchase of Aquantive at almost twice its valuation *and* these sentiments, its hard not to believe that in spite of Ballmer’s unfathomable blustering, Microsoft isn’t standing still while Google moves forward on all fronts.

I mean, if I was Microsoft the idea of Google buying up large swaths of dark fibre and building data centers in secret — all so it can move data more efficiently and effectively without telco’s or 3rd parties because its betting on software-as-service … well, that’d still give me the heebie jeebies.

On the other hand, Microsoft seems to acknowledge, if not words, then with these kinds of actions, that the future of software isn’t going to be off-line, and that the future is going to be online — if not some mixture of online and offline services. And that those services are going to require some kind of freemium model. And that to make sure that its able to recoup it capital losses, it will require some kind of advertising model while users are using the free versions.

And if that is *in fact* the case, you can bet that we haven’t seen or heard the last from Microsoft in this arena, and I am actually *quite* interested to see what kind of on-line versions that it has planned for its bread and butter applications.

Particularly now that it can create really rich online experiences with Silverlight — which, is I think one edge that Microsoft has over Google. Not that Google couldn’t use Silverlight (or Apollo) itself … but that would seem a little, well, unseemly, wouldn’t you say?