Redmond, Washington — Microsoft has assigned Morgan Stanley a task to help find a potential buyer for Razorfish, its digital ad agency, and according to sources, one possible bidder has come forward is believed to be French marketing company Publicis Group SA which is planning more acquisitions in the online advertising business, the Financial Times said on its Website late Sunday.
Microsoft, which acquired Razorfish in 2007, formerly known as Avenue A Razorfish, as part of its US$6bn (€4.3bn) acquisition of aQuantive, has reportedly hired Morgan Stanley to find a potential buyer.
According to reports released by Financial Times, which identified French marketing company Publicis Groupe as a potential buyer. The company bought Irish online advertising agency Interactive Return last year for an undisclosed sum.
According to reports quoting an analyst, Razorfish may be worth at US$600m-US$700m price tag, based on sales of about $400 million last year and profit margins for similar businesses of 12 to 13 percent.
Previously known as Avenue A/Razorfish, the ad agency was recognized for creating the logo for Microsoft’s new search engine Bing, as well as developing the online ads for the ensuing publicity campaign. The Seattle-base agency is one of the largest digital agencies in the States which has more than 2,000 employees and counts Dell, Disney, and Nike among its clients.
Maurice Lévy, Publicis chief executive, said funds from a refinancing this month could be used for acquisitions, particularly in digital and emerging markets, which are performing better than traditional advertising in the US and Europe.
“There are some opportunities” for acquisitions, he said.
Lévy declined to comment on whether he would be interested in Razorfish. But one analyst, who asked not to be named, said: “Publicis would be willing to look at everything, it has the best balance sheet.” Razorfish is “the more likely name”, the analyst added.
Razorfish is one of the biggest interactive advertising and marketing agencies, featuring a client list that includes McDonald’s Corp, Starwood Hotels & Resorts, and Carnival Cruise Lines.
Microsoft and VivaKi, the digital arm of Publicis, last week unveiled a broad cooperation deal to develop new content, improve marketing performance and better target digital advertising audiences.
Other agency groups, such as Omnicom and WPP, facing the same structural shift of marketing budgets into digital, could also be interested in Razorfish.
Representatives for Microsoft and Razorfish did not immediately reply to requests for comment.