A Financial Times
report said Microsoft Corp. (NASDAQ:MSFT) tapped Morgan Stanley (NYSE:MS) to find a potential
buyer for Razorfish, its digital agency, in a deal that could be worth around $600 million to $700 million.
Microsoft gained Razorfish -- which designed the logo for
new search function Bing -- when it paid $6 billion for digital marketing agent aQuantive Inc. after losing out to Google Inc. (NASDAQ:GOOG) in the acquisition of online ad provider DoubleClick Inc. in 2007. Last year, online ad networks were being gobbled up in an
online M&A binge tracked by our sister blog Dealscape.
FT says that in August more favorable tax implications will allow Microsoft to sell an asset that some see as a conflict of interest with Microsoft Advertising. Microsoft, while integrating many parts of aQuantitive, has let Razorfish operate
almost autonomously, Mediapost.com notes.
Omnicom Group Inc., WPP Group plc and French marketing company Publicis Groupe SA -- which is planning more acquisitions in online advertising -- were cited as a possible bidders. Publicis
declined to comment about the deal rumor.
Last week, Microsoft and the digital arm of Publicis, Vivake Nerve Center, created a
broad strategic partnership in order to make more engaging digital content, increase marketing performance and to more sharply define audiences. As part of that agreement, Starcom MediaVest Group, Zenith Optimedia and Digitas will be one of the first agency networks to use Microsoft Advertising's Admira technology to help clients plan and buy media when Admira goes live in the fourth quarter.
It's well known that a lot of money is flowing into online advertising. Microsoft CEO Steve Ballmer, however, took that thought a step -- perhaps a leap -- further, recently saying at an advertising gathering in France that
all content will be online in 10 years, with newspapers, magazines and TV programs fizzling out. Seattle's Razorfish, a 2,000-employee company founded in 1995, has clients including Nike Inc. (NYSE:NKE), Carnival Cruise Lines, MillerCoors, Kraft Foods Inc. (NYSE:KFT), Levi Strauss & Co., McDonald's Inc. (NYSE:MCD) and Starwood
Hotels & Resorts Worldwide Inc. (NYSE:HOT). -
Baz HiralalGo to the FT storySee Mediapost.com's take
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