14 DAY TRIAL // Microsoft will receive no less than $530 million in both cash and stock for the sale of its digital marketing agency Razorfish. At the end of the past week, the Publicis Groupe confirmed the acquisition of Razorfish for a little over half a billion dollars. The software giant welcomed the unloading of the online advertising agency, which is running Internet campaigns through a wide range of companies, including Microsoft competitors such as Google. Razorfish found a home with Microsoft back in 2007, when the Redmond company acquired aQuantive for $6 billion in response to Google's move to buy DoubleClick for $3 billion.
"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. 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," stated Steve Ballmer, Microsoft's chief executive officer.
In addition to taking Razorfish off of Microsoft's hands, the Publicis Groupe also announced that the two companies had inked a Strategic Alliance Agreement. The duo revealed that the agreement was scheduled to go live after the acquisition of the online ad agency was complete. Maurice Levy, chairman and chief executive officer of Publicis Groupe, noted that he regarded Razorfish as a key element of the evolution of its digital communications business.
"More than anything, this acquisition should demonstrate that Publicis Groupe now presents a wider pool of resources, talent, and expertise that will help our clients market their products or services in a way that takes maximum advantage of the new digital world. Our capabilities will be further enhanced by the great talent throughout Razorfish, and we are happy to welcome this new addition to our family," Levy stated.
Publicis Groupe indicated that the Razorfish brand would survive the acquisition, and that the ad agency would become an integral part of VivaKi, a new group created in mid-2008, joining the likes of Digitas, Starcom MediaVest Group, Denuo, and ZenithOptimedia. Chief Executive Officer Bob Lord will continue to lead Razorfish.
"Razorfish is known for extraordinary digital customer experiences and brings with it a robust suite of tools that will enhance the current portfolio of capabilities we are building to keep our clients connected to people in an increasingly digital world," Levy added. "The combination of Razorfish's assets with the complementary expertise we already possess will be highly valuable to our clients and shareholders."
The new Strategic Alliance Agreement signed by Microsoft and Publicis Groupe represents an expansion of a previous partnership announced by the two companies. In June, the duo entered a broad strategic cooperation agreement and, with the latest move, Publicis Groupe media clients will be able to buy display and search advertising from Microsoft on what was referred to as favorable terms. This will be valid for the five-year term of the agreement, and clients will have to guarantee specific minimum aggregate purchase levels.
"Publicis Groupe offers an ideal technological and cultural match for Razorfish and the opportunity to share a wealth of new resources with our clients. Our capabilities in technology are highly compatible with Publicis Groupe's online advertising operations and will accelerate Razorfish's mission to expand its global reach and broaden its services. Working closely with the other great companies in the Publicis Groupe/VivaKi portfolio, we will be able to grow our talent and provide additional opportunities for professional development and extend our capabilities for clients," Lord added.