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Publicis Buys Razorfish from Microsoft

August 10 2009

Media services giant Publicis Groupe has acquired digital agency Razorfish from Microsoft for around $530m. Razorfish, which joined the software giant as part of its acquisition of aQuantive in 2007, places a strong emphasis on insight and analytics.

The agency's Analytics practice employs more than 60 analysts, while its Strategy and Planning section offers clients advanced consumer research including Customer Insight, Segmentation and Metrics Definition & Analytics.

The buy consists of a combination of cash and Publicis Groupe treasury shares, and the parties have also announced a Strategic Alliance Agreement effective on completion - this builds on the more general strategic cooperation agreement the two groups announced in June.

Publicis Chairman and CEO Maurice Lévy says the acquisition 'will enhance the current portfolio of capabilities we are building to keep our clients connected to people in an increasingly digital world'. He comments: 'The acquisition of Razorfish is another step forward in realizing our strategic vision of building a world leader in digital communications, a critically important space for our clients'. When the transaction is completed, Levy says approximately a quarter of the group's annual revenues will come from digital communications.

Microsoft CEO Steve Ballmer says his firm looks forward to continuing to work with Razorfish as one of its agencies, adding: 'we're confident that as a part of Publicis Groupe, Razorfish will build on its success to date in the digital advertising industry.'

Razorfish will keep its name and will be grouped as part of VivaKi, the new unit created last summer to synchronise the efforts of Publicis Groupe subsidiaries Digitas, Starcom MediaVest Group, Denuo and ZenithOptimedia.

The new Strategic Alliance Agreement allows Publicis Groupe agencies to purchase display and search advertising from Microsoft on favorable terms for a five-year period, in exchange for minimum guaranteed aggregate purchase levels; and makes Razorfish a preferred provider to Microsoft for digital strategy, creative and experiential marketing services, on which Microsoft will spend a minimum each year. Razorfish CEO Bob Lord will continue in the role, with his existing management team.

The transaction is expected to close during the fourth quarter of 2009, subject to the usual conditions including US antitrust clearance.

Publicis Groupe has activities spanning 104 countries on five continents, and employs around 44,000. Razorfish has offices in the US, Australia, China, France, Germany, Japan, Spain and the UK. Web sites: www.publicisgroupe.com and www.razorfish.com .

All articles 2006-19 written and edited by Mel Crowther and/or Nick Thomas.

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