Report: Microsoft to cut Razorfish loose

Microsoft is putting Internet ad agency Razorfish up for sale, according to a Financial Times report Sunday.

Microsoft, which acquired Razorfish in 2007 as part of its $6 billion takeover of Aquantive, has reportedly hired Morgan Stanley to find a potential buyer. The report identified French marketing company Publicis Groupe as a potential buyer.

Formerly known as Avenue A/Razorfish, the agency was credited with designing the logo for Microsoft's new search engine Bing, as well as creating the online ads for the ensuing publicity campaign. The Seattle-based agency has more than 2,000 employees and counts Dell, Disney, and Nike among its clients.

One analyst cited in the FT.com report estimated Razorfish could be worth $600 million to $700 million.

Representatives for Microsoft and Razorfish did not immediately reply to requests for comment.

The deal for Aquantive was Microsoft's largest ever and highlighted the importance of supporting more-advanced advertising products and technologies across areas including media planning, video on demand, and Internet Protocol television. The acquisition of Razorfish specifically was considered especially important as a way to give Microsoft a new presence in the ad services business and also help promote its rich media and video plug-in Silverlight.

[Spartan_458]

Okay, so tell me why they're being sold again?

[mbenedict]

I believe they planned to spin off Razorfish from day 1. When Microsoft purchased Aquantive, they were really interested in Aquantive's ad distribution business -- to compete against a combined Google & Double Click. Getting Razorfish as part of the deal was a bonus, but was not the core reason for Aquantive's acquisition.

Having a first-class ad distribution channel is strategic for all of Microsoft's online efforts, while running an ad agency just doesn't align with Microsoft's business plans.

[TV James]

I think Microsoft just got bored with them. Or else they got sloppy with this quarter's reorg.

[sdipaola]

razorfish was once the hippest design firm during the internet boom years. as usually get bought by a big company, start the slow death.

[davidleew]

they are dropping razorfish most likely because they are rejoining NBC and Hulu with hypervideo search is going to be the ad agency...that's why.

[davidmcelroy_dotmac]

I'd want to get rid of the lightweights who were responsible for designing the Bing logo, too. That thing looks as though it was done by an amateur.

[cvaldes1831]

This agency was at the top of the world way back when Joe Firmage was in charge and thought that little green men made it all happen.

Good times, good times.

[dotcombubble]

Joe Firmage ran USWeb, not Razorfish. Razorfish only picked up bits of USWeb, marchFIRST, blah blah blah, well after UFO Joe left for the stars.

[Hunnter2k3]

Oh sweet irony if Google bought it.

Well, obviously it won't happen... OR WILL IT?! Na, probably not.