Microsoft to Sell Razorfish

Microsoft acquired Razorfish (Formerly Known as Avenue A | Razorfish) as a part of acquiring its parent company aQuantive in 2007 for $6 billion in cash.

Razorfish Inc is one of the world's largest interactive agencies and one of the largest buyers of advertising space. It provides services to its clients in the areas of digital advertising and content creation, media buying, strategic counsel, analytics, technology and user experience. Even as it was acquired by Microsoft in 2007 it functioned as an independent company.

Razorfish had its offices all over world Paris, Hong Kong, Sydney, Shanghai, Beijing, London, Berlin, Frankfurt and a joint venture in Tokyo as part of acquisitions and offices in US in New York, Portland, Chicago, San Francisco, Seattle, Philadelphia, Los Angeles, Atlanta, and Austin. At present Razorfish have more than 2000 employees worldwide.

Razorfish had world famous companies as its clients like AT&T, Capital One, EMC, Best Buy, Carnival Cruise Lines, Economist, CondéNet, Ford Motor Company, Kraft, Williams Sonoma, Adidas, and the Wyeth Pharmaceuticals.

Now Microsoft has agreed to sell Razorfish to Publics Groupe for $530 million in cash and 6.5 million Publicis shares which is nearly 1.4 to 1.5 times its (Razorfish’s) revenue. The deal is part of a 5yr agreement in which Publicis will buy display and search advertising from Microsoft at attractive terms in return for minimum guaranteed purchases. It gives Microsoft, which is based in Redmond, California, a stake of about 3 percent in Publicis.

This deal of Microsoft with Publicis will help Microsoft as battleship in the search-engine war with Google using Bing, as Publicis is one of the world’s largest advertising groups. It owns agencies like Leo Burnett and Saatchi & Saatchi, the media buyers Starcom MediaVest and ZenithOptimedia and the digital advertising company, Digitas.

Publicis has agreed to spend hundreds of millions of dollars in advertising on Microsoft’s web properties, mostly on Bing. This definitely provides ad boost to the Microsoft-Yahoo search deal announced last month.