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 engaged Morgan Stanley to conduct discussions and find them a possible buyer for the agency, which according to predictions should sell for somewhere between $600 million and $700 million in the current economic climate. It’s hardly a surprise move as there has been speculation over whether Razorfish really fits into Microsoft’s new strategy to trim back expenses and restrict its actions to core business needs through the recession.
When Microsoft bought aQuantive back in 2007 its main purpose was to create a stronger online advertisng network for the brand and enable the company to compete more effectively with Google. Avenue A/Razorfish, as the company was then called, was far less important to Microsoft than the other benefits aQuantive had to offer as much as it would allow the company to significantly broaden its online ad network and give it 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 on the web.
Razorfish has a number of A-list clients including Nike, Mercedes-Benz USA, Levi-Strauss & Co and Audi, for whom it has created high profile online advertising campaigns with great success. The amount of money involved might not seem much to Microsoft, but ridding themselves of the conflict of interest could give Microsoft the opportunity to concentrate on marketing its own products in its own way. The FT report names French marketing company Publicis Groupe as the most likely contender to buy Razorfish, following further indications that the two companies are also planning to work together on a TV advertising campaign.
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