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Microsoft Selling Razorfish?

July 14, 2009

The Wall Street Journal reported on Monday that Microsoft has approached five of the world’s biggest advertising companies about buying its digital advertising agency Razorfish.

The newspaper said that the deal could include using Microsoft’s advertising technologies and the possibility of buying the hundreds of millions of dollars of ad space across its Web properties.

The daily also reported that WPP, Omnicom Group and Publicis Groupe have expressed their interest in Razorfish and were considering a considering a more involved relationship with the company.

Morgan Stanley has been hired by Microsoft to shop Razorfish.  Microsoft has also been in contact with Interpublic Group and Dentsu, according to the Wall Street Journal.

The newspaper said that the move is the latest by Microsoft to compete with Google in the advertising market.

Razorfish has around 2,000 employees and gained $400 million in revenue last year.  It has clients like Best Buy, Mercedes-Benz USA and Mattel.

According to The Journal, a buyer would be able to use Microsoft’s digital ad services, or buy an ad space across Microsoft’s digital properties like its new search engine Bing, websites, the Zune music player and the Xbox gaming console.

But, the newspaper cautioned that “talks are preliminary and that any deal isn’t likely to happen for at least a couple of months.”

The report said that the price range could be very wide, anywhere from $400 million to “hundreds of millions of dollars more, depending on the technology or ad-buying commitments included in the deal.”

The Journal noted that like other ad agencies, Razorfish has been hit by the falling economy and has both laid off employees and closed offices this year.

Razorfish was purchased by Microsoft two years ago as part of its six billion dollar purchase of digital marketing aQuantive.

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