Microsoft Sells its Advertising Agency Razorfish

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 has been valued between $600 million and $700 million. 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 enable the company to compete more effectively with Google. The benefits of owning Avenue A/Razorfish, as the agency was then called, were secondary to other aspects of what aQuantive could offer Microsoft 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 produced successful online advertising campaigns for a number of big clients such as 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 the decision to sell could enable Microsoft to put more emphasis on marketing their own products across different media. According to the Financial Times the French company Publicis Groupe are the most likely contender to buy 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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