AKQA, a San Francisco-based digital ad firm, has ticked off one item on its long shopping list, buying search marketing company Searchrev. Financial terms were not disclosed.

According to an inside source, Searchrev's annual revenue is less than $10 million. However, AKQA also plans to establish the largest independent digital marketing concern in the nation, and the company believes the Searchrev buyout will pay off.

"I think eventually we will be a very attractive company to be public. We are growing fast in a fast category," Tom Bedecarre, chief executive of AKQA, is quoted as saying by the Wall Street Journal.

Earlier this year, private-equity firm general Atlantic LLC bought a majority stake in AKQA for about $250 million, and AKQA began its ambitious digital assets acquisitions then. With the expected over $8.6 billion U.S. market this year, search was definitely a great starting point.

Another example is iCrossing, an Arizona-based company, following the aQuantive path and buying digital assets over the past year. Already having many search marketing assets, though, iCrossing recently purchased Proxicom, a digital ad agency that builds Web sites for marketers.

In spite of a good first step, AKQA may face many obstacles in building a digital holding company. Due to the fast-growing digital advertising market, prices for digital ad firms have skyrocketed. Additionally, many different parties involved in the lucrative market - ad holding companies, private equity, media companies and digital giants such as Google, have aggravated the competition over digital assets.

“It's extremely competitive because most of the good companies are being pursued by multiple companies,” said Seth R. Alpert, managing director of AdMedia Partners, a New York boutique investment bank specializing in advertising and marketing transactions.

Analysts pointed out that both AKQA and iCrossing still have a long way to go before reaching the aQuantive level. Neither has an ad-serving firm, to get the ads from the marketers to the Web sites, and the forecasted revenues are still not competitive. aQuantive's 2007 revenue was forecasted about $615 million before the purchase, while AKQA have estimated $100 million revenue this year, and iCrossing $110 million, according to the Wall Street Journal.