Microsoft May Swap Avenue A/Razorfish

    August 25, 2008

It seems that Microsoft has been struck with a slight case of buyer’s remorse.  The Redmond-based corporation took control of Avenue A/Razorfish about one year ago as part of the aQuantive acquisition, and reports indicate it’s now trying to trade the ad agency to WPP.

Microsoft paid $6 billion for aQuantive after Yahoo picked up Right Media for $680 million and Google got DoubleClick for $3.1 billion.  Many onlookers classified the move as being motivated by panic, and Microsoft hasn’t done anything too interesting with Avenue A since then.

Razorfish Logo

So, as reported by Abbey Klaassen, "Here’s how a deal could unfold, according to people familiar with the discussions: Microsoft unloads the agency in exchange for a WPP package that includes 24/7’s Open AdStream publisher ad-serving tool plus cash."

24/7 Real Media is more in line with Microsoft’s Google- and Yahoo-fighting goals; the 24/7 homepage even has a blurb on it about an old Yahoo-WPP strategic partnership.

A swap between Microsoft and WPP isn’t certain, since it’s unlikely that Microsoft could recoup everything it spent in the first place.  But if Steve Ballmer wants to get more aggressive about catching up to his competitors, look for talks to continue and some more serious number-crunching to take place.