Advertising Agency Razofish To Be Sold By Microsoft
Microsoft is reportedly looking to sell its online advertising agency Razorfish just two years after acquiring it as part of a $6bn deal for parent company aQuantive Inc. According to a report in the Financial Times, Microsoft has brought in the investment bank Morgan Stanley to seek out a potential buyer for the agency, which according to predictions should sell for somewhere between $600 million and $700 million in the current economic climate. There has been some speculation about whether or not Microsoft would part with Razorfish as part of its new strategy to trim back expenses and concentrate purely on its core business during the recession.
When Microsoft bought aQuantive back in 2007 it was looking to reinforce its online advertising presence and be in a better position to compete with Google in online advertising. Avenue A/Razorfish, as the company was then called, was far less important to Microsoft than the other benefits aQuantive had to offer in terms of expanding Microsoft’s online advertising presence and give the company a much better chance of competing with the biggest online contender, Google. The ownership of an advertising agency, however, may have meant a conflict of interest for Microsoft as Razorfish is a direct competitor to Microsoft’s own advertising campaigns for marketing its products online.
Razorfish’s extensive list of high profile clients includes Nike, Mercedes-Benz USA, Levi-Strauss & Co and Audi. The estimated price of the agency may seem like a mere drop in the ocean of Microsofts finances, but ridding themselves of the conflict of interest could enable Microsoft to put more emphasis on marketing their own products across different media. The FT report names French marketing company Publicis Groupe as the most likely potential buyer for Razorfish, following rumours that Publicis and Microsoft are planning to join forces for a TV ad campaign in the near future.
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