LinkExchange Being Acquired by Microsoft

Microsoft is acquiring San Francisco-based LinkExchange Inc., a pioneer in the Web banner business that lately has been expanding to provide a full line of online marketing services.

The Wall Street Journal quoted sources as saying the stock deal is valued at $250 million. The companies themselves were mum on the financial arrangements.

LinkExchange will become part of the MSN network of Internet products and services.

LinkExchange’s flagship product is an advertising network of more than 400,000 Web sites that claims to reach more than 21 million online consumers. The company also offers a suite of online marketing solutions aimed at helping small businesses build exposure on the Web and extend their online customer base.

“MSN is committed to being an important ally for every small business online, and with this acquisition MSN can bring small-business customers excellent online marketing tools,” said Laura Jennings, vice president of MSN. “We are also able to expand the MSN network to include the hundreds of thousands of high-quality smaller sites in the LinkExchange network, which represent the heart of the Web.”

LinkExchange members now will be able to advertise across the MSN network of services, which includes the MSN Expedia travel service, the MSN CarPoint online automotive service and MSN MoneyCentral. In addition, each of the small businesses and Web sites in the LinkExchange network will be included in the MSN directory and MSN Web Search results page, giving them greater exposure.