Microsoft-Publicis strike $530 million deal for Microsoft’s Web ad agency Razorfish

According to recent reports from Microsoft, the software maker Sunday has struck a $530 million cash and stock deal, for its digital ad agency Razorfish, with the French advertising giant Publicis Groupe.

The acquisition of Razorfish is being made for 1.4 to 1.5 times its annual revenue.

The strategic Microsoft

-Publicis deal for Razorfish - which Microsoft has owned since the 2007-acquisition of its parent company aQuantive - was finalized after Microsoft held an auction for its Web ad agency, which attracted bids from some of the leading companies in the advertising arena - incl

uding the world's largest agency company, WPP, and Japan's largest agency company, Dentsu.

As per

company reports, after the deal is closed - most likely in the fourth quarter - Razorfish will function as a

n autonomous unit of the Publicis' VivaKi division; thereby continuing with its present management.

Commenting on the significance of the acquisition of Razorfish for Publicis, Maurice Lévy, Chairman and CEO of Public

is, said that the company expects to derive nearly a quarter of its revenue from interactive and digital advertising in 2010. Publicis already owns agencies like Saatchi & Saatchi, Leo Burnett, the MediaVest Group and ZenithOptimedia.

In a statement from Paris, Levy said: "The deal is another step forward in realizing our strategic vision of building a world leader in digital communications, a critically important space for our clients."

by Amandeep Dhaliwal