Aug 09

Microsoft has been looking to sell Razorfish, the digital agency it acquired through its $6bn purchase of ad services holding company aQuantive in 2007. Publicis Groupe, the world's second largest media agency, finally sealed the bid to buy Razorfish for $530m in cash and stock. In an economic climate where sustaining and growing revenues is in itself a question mark, it is probably a very welcoming and strategic deal for Razor fish to be valued at 1.4 to 1.5 times the annual revenue. It is equally strategic for Publicis with the agreement calling for Microsoft to spend a certain amount with Razorfish. While there may be many discussions around this sale being a costly one for Microsoft, Microsoft also got itself a portion of the pie through the agreement calling for Publicis to buy display and search advertising on Microsoft properties like MSN.com and Bing, the new search engine. It was this move of Publicis agreeing to spend the specified amount on ad space on the Microsoft digital properties after a deal closed, which won them the bid against WPP and Dentsu. Maurice Levy, Chairman and CEO of Publicis Groupe, must be a happy man today. In a press release, he stated that this deal is " “another step forward in realizing our strategic vision of building a world leader in digital communications, a critically important space for our clients,” The absolute results of what this strategic alliance amounts to will have to be seen in time as is the case with such mergers and acquisitions promising strategic benefits.