Microsoft sells digital marketing agency Razorfish to Publicis Groupe

Stuart Corner
Monday, 10 August 2009 03:25

Business IT - Technology

Microsoft is to sell digital marketing agency, Razorfish to France based global advertising and PR company, Publicis Groupe, for $US530m in cash and shares, and the two companies will form a strategic alliance.

According to Publicis, "Razorfish counsels its clients on how to leverage digital channels such as the Web, mobile devices, in-store technologies and other emerging media to engage people, build brand loyalty and provide excellent customer service. The company is increasingly advising marketers on social influence marketing, its approach for employing social media and social influencers to achieve the marketing and business needs of an organisation."

Razorfish has offices across the United States and in Australia, China, France, Germany, Japan, Spain and the United Kingdom. It was acquired by Microsoft in 2007 as part of its acquisition of aQuantive.

Following closure of the deal, Razorfish will continue to operate under its brand name as part of VivaKi, a Publicis entity created in June 2008 to leverage the combined scale of the autonomous operations of Digitas, Starcom MediaVest Group, Denuo, and ZenithOptimedia. Razorfish's management team, led by CEO Bob Lord, will remain unchanged. Major clients of Razorfish include Best Buy, Ford, McDonald's, Microsoft, and Starwood Hotels.

VivaKi managing director, David Kenny, said, "We pursued this acquisition based on its potential to deliver client benefit. The addition of Razorfish to the VivaKi portfolio gives us a wider and more diverse platform of capabilities which will convert to optimal service offerings and other opportunities for our clients." He added: "In collaboration with Microsoft, we will be able to develop and provide our clients exclusive, first mover access to new opportunities, programs, content, inventory and experiences."

The new strategic alliance agreement between Publicis and Microsoft will extend a five year agreement announced in June designed to allow advertising agencies to purchase display and search advertising from Microsoft on favourable terms, in exchange for certain minimum guaranteed aggregate purchase levels.

The new agreement also provides that Razorfish will continue to be a preferred provider to Microsoft for digital strategy, creative and experiential marketing services, and contains a commitment by Microsoft to spend a minimum amount for those services each year.

Publicis is the world's fourth largest communications group and the second largest media agency. It claims to be a global leader in digital and healthcare communications, employs 44,000 people and has activities spanning 104 countries on five continents.

Publicis owns global ad agencies Leo Burnett, Publicis, Saatchi & Saatchi, and two multi-hub networks, Fallon and 49 percent-owned Bartle Bogle Hegarty. Media consultancy and buying is offered through two worldwide networks, Starcom MediaVest Group and ZenithOptimedia; and interactive and digital marketing led by Digitas.