Back in 2007, Microsoft made a major push into the digital marketing arena through a $6 billion deal for Aquantive; part of that acquisition was the newly-combined digital marketing agency Avenue A/Razorfish, which creates interactive advertising campaigns and marketing materials spanning everything from banner ads and kiosks to complete Web sites to Facebook games. Razorfish dropped the Avenue A portion of its name earlier this year, but this summer reports began surfacing that Microsoft was looking for a potential buyer for Razorfish, and now the France-base Publicis Groupe has announced it will be taking over Razorfish in a deal worth about $530 million.
Publicis is the world’s third-largest advertising group and was already the top player in digital advertising, according to industry sources: Razorfish was the second-largest player in the single advertising sector. According to Publicis CEO Maurice Levy, the Razorfish acquisition resulted from an auction process; other bidders includes Japan’s Dentsu Inc and the UK’s WPP Plc.
"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 that they have found a new long-term home with Publicis Groupe," said Microsoft CEO Steve Ballmer in a statement. "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."
Since the aQuantive acquisition, Razorfish’s largest clients has been Microsoft; other major clients include McDonalds, Ford, and Best Buy. Under the deal, Razorfish will remain Microsoft’s preferred digital marketing provider; Microsoft will annually purchase a minimum guaranteed amount of services from the company as part of broader five-year agreement with Publicis. Publicis will also be buying display and search advertising from Microsoft as it continues to promote its Bing search service; Publicis has a similar deal in place with Google.
[Disclosure: Razorfish has been one of the author’s clients; this article contains no privileged information.]
