Microsoft sells Razorfish to swim away with $530 million

Digital marketing agency

Microsoft is selling off its digital marketing agency Razorfish to Publicis Groupe for $530 million.

The move comes following a search deal with Yahoo, which will see the web firm handle the bulk of search advertising sales.

Under the terms of the acquisition, which should close in the fourth quarter of the year subject to regulatory approval, Razorfish will maintain its moniker and operate as part of Publicis' VivaKi arm.

"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's chief executive 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."

Publicis Groupe's client agencies will benefit from Microsoft display and search advertising at favourable rates during a five-year term.

"When we complete this transaction, approximately a quarter of our annual revenues will come from digital communications, and we believe we have more capacity to grow with new clients," said Maurice Levy, chairman and chief executive of Publicis Groupe, in a statement.

"Equally important, we are very pleased that as a consequence of this transaction, we are building upon the strategic relationship with Microsoft that we announced in June to explore ways to work together to help deliver innovative on-line solutions to a broad spectrum of brand marketers."

Maggie Holland

Maggie has been a journalist since 1999, starting her career as an editorial assistant on then-weekly magazine Computing, before working her way up to senior reporter level. In 2006, just weeks before ITPro was launched, Maggie joined Dennis Publishing as a reporter. Having worked her way up to editor of ITPro, she was appointed group editor of CloudPro and ITPro in April 2012. She became the editorial director and took responsibility for ChannelPro, in 2016.

Her areas of particular interest, aside from cloud, include management and C-level issues, the business value of technology, green and environmental issues and careers to name but a few.