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Microsoft to offload digital ads agency?

Madmen not wanted

A French marketing specialist is reportedly the latest beau being targeted by Microsoft for an arranged marriage with its digital advertising pick-up Razorfish.

Microsoft has appointed Morgan Stanley to find a buyer for Razorfish, with Publicis thought to be in the running for an acquisition the FT has reported. Razorfish has been valued at between $600m and $700m. Microsoft declined to comment.

Razorfish was pulled into the Microsoft machine as part of the software company's $6bn acquisition of ads campaign and tools specialist aQuantive in May 2007.

The deal marked Microsoft's wholesale jump into online advertising against online ads and search giant Google. The goal is to let clients not just place ads on MSN, but to also co-ordinate ads on Microsoft properties like its Xbox games and online community and Office Live.

Microsoft chief executive Steve Ballmer called the deal the next step in the evolution of Microsoft's ad network from its initial investment in MSN, in the mid 1990s.

At the time of the deal, Microsoft called Avenue A/Razorfish - now just Razorfish: "One of the largest interactive ad agencies in the world, providing advertisers with industry-leading digital marketing consultation, media planning and buying, and creative services that help advertisers use the online channel to build meaningful, profitable relationships with their customers."

It seems, though, Microsoft was not interested in becoming an advertising agency - Razorfish's clients include Audi, Nike and Kraft. The company was last year reported to be looking for a buyer for Razorfish and then a partnership with PR and ads powerhouse WPP.

aQuantive's ads tools and technologies were the real drivers for this deal. The company delivered an operation of 2,600 staff with ad-serving company Atlas and an online-advertising exchange network called Drivepm, which aggregated excess inventory from publishers and resold it to advertisers. Microsoft planned to merge its own advertising platform with Atlas.

Any sale would come as Microsoft trims its operating expenses to get through the recession. That's a strategy that's so far seen the company shut down or spin out a number of products and units considered outside of the core business.®

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