Microsoft reportedly eyes Web ad firm

NEW YORK (CNNMoney.com) -- A report that Microsoft might be interested in 24/7 Real Media sent shares of the Internet advertising firm soaring in pre-market trading Tuesday.

The New York Post reported Microsoft (Charts, Fortune 500) is considering a price in the $1 billion range for New York-based 24/7 Media. It closed Monday with a market value of about half that price.

Analysts surveyed by Thomson Financial have a median target price of $11 for the firm, or which would give it a market value of $561 million.

Shares of 24/7 Media (Charts) gained $3.85, or 39 percent, in pre-market trading Tuesday. Shares had already shot up 24 percent in trading Wednesday and Thursday last week on a rumor that advertising firm WPP Group (Charts) was interested in the company. But shares then retreated 5 percent through the close of trading Monday.

Microsoft reportedly was interested in buying online ad firm DoubleClick, but competitor Google (Charts, Fortune 500) reached a deal on April 13 to buy that firm for $3.1 billion from private equity firm Hellman & Friedman, which had taken it private two years ago in a $1.1 billion deal.

Yahoo (Charts, Fortune 500) announced Monday it would buy the 80 percent of online ad exchange Right Media it didn't own for $680 million, valuing the entire firm at around $850 million

CNNMoney.com editor at large Paul LaMonica had suggested in his Media Biz blog on Thursday that Microsoft should look at 24/7 Media or other DoubleClick competitors such as ValueClick or aQuantive.

Shares of ValueClick (Charts) were also up 4 percent in pre-market trading Tuesday.