Microsoft sells digital ad firm for US$530m

10 Aug 2009

Microsoft yesterday announced that French advertising company Publicis will be acquiring its digital marketing firm Razorfish for US$530m as part of a joint agreement.

The two parties have signed a strategic alliance agreement that becomes effective following the closing of the transaction, which was part-cash, part-Publicis Groupe treasury shares.

The Strategic Alliance Agreement builds upon and further expands the strategic co-operation agreement already announced in June between Microsoft and Publicis Groupe.

The five-year strategic alliance agreement will see Publicis buying display and search advertising from Microsoft on favourable conditions, in exchange for certain minimum guaranteed aggregate purchase levels, while Microsoft will continue to use Razorfish as a preferred provider for digital strategy, creative and experiential marketing services.

Razorfish, which was founded in New York in 1995, was acquired in 2007 by Microsoft as part of the larger acquisition of its parent firm aQuantive, and is one of the largest digital marketing firms worldwide.

“The acquisition of Razorfish is another step forward in realising our strategic vision of building a world leader in digital communications, a critically important space for our clients,” said Maurice Levy (pictured), chairman and chief executive officer of Publicis Groupe.

“More than anything, this acquisition should demonstrate that Publicis Groupe now presents a wider pool of resources, talent, and expertise that will help our clients market their products or services in a way that takes maximum advantage of the new digital world.

“Our capabilities will be further enhanced by the great talent throughout Razorfish, and we are happy to welcome this new addition to our family.”

It was known since June that Microsoft had put Razorfish up for sale. However, the interactive, digital content creation and advertising company has always operated independently of the Redmond-based software firm.

Steve Ballmer, Microsoft’s CEO, said: “We are grateful for the contributions Razorfish has made to our online advertising business since joining the company as a part of the aQuantive acquisition in 2007, and are pleased it has found a new long-term home with Publicis Groupe.

“We look forward to continuing to work with Razorfish as one of our agencies, and we’re confident that as a part of Publicis Groupe, Razorfish will build on its success to date in the digital advertising industry.”