Microsoft writes down aQuantive as worthless

Brian Turner

July 3, 2012
Microsoft Logo

Microsoft has written off the value of aQuantive, a company it bought in 2007 for over $6 billion, as effectively worthless.

The statement came in its yearly goodwill report to investors.

Microsoft had originally bought aQuantive with the aim of using it to tackle Google’s dominance in online marketing, not least after Google bought Doubleclick.

However, aQuantive executives left the company not long after the deal, and Microsoft has been left ever since holding an ad platform that it has been unsure what to do with.

In the meantime, Google has strengthened its online marketing presence, and Microsoft are left burning $500 million a year in losses through its internet activities, including promoting Bing.

Microsoft didn’t make a complete loss on the acquisition, though, selling one of aQuantive’s subsidiaries in 2009 for $530 million.

Acquiring aQuantive

Microsoft’s acquisition of aQuantive in 2007 had been its biggest to date - only beaten by the company’s purchase of Skype for over $8 billion a few years later.

aQuantive was itself the parent company of three digital marketing service companies: Avenue A/Razorfish, Atlas Solutions, and DRIVE Performance Solutions.

At the time of the acquisition, aQuantive was positioned as one of the 15 most successive advertising companies by revenue.

The aim was to strengthen Microsoft’s online ad platform and increase revenues, and shortly after purchase, aQuantive was renamed “Microsoft Advertising”.

Ironically, even though Microsoft Advertising has failed to break through, the acquisition wasn’t a total loss.

In 2009 Microsoft sold off Razorfish, one of the subsidiaries that came with aQuantive, for $530 million in cash and stock to Publicis Groupe.

Razorfish remains one of the world’s largest interractive agencies, with over 2,000 employees worldwide.

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