Publicis Buys Razorfish

The France based Publicis group has bought over Microsoft's Digital advertising agency Razorfish for $530 million.

Publicis will issue 6.5 million in shares to the software giant, worth $232.6 million, at Friday’s closing price, and pay the rest in cash. The two companies also signed a strategic alliance agreement to deepen their ties in digital advertising while Microsoft uses Bing to expand in search.this deal is at less than half the multiple Publicis paid for Digitas and WPP paid for Real Media at the top of the last cycle a couple of years ago.

Microsoft acquired the agency, formerly called Avenue A Razorfish, as part of its $6bn takeover of aQuantive in 2007.Some of the biggest clients which Razorfish has includes big names in brand advertising like Nike,Audi,AT&T and Kraft

The Publicis Group is among the big four global advertising holding companies along with Omnicom, Interpublic and WPP).The company is present across 104 countries. Publicis has strategic alliances with Dentsu, Inc. The company was founded by Marcel Bleustein-Blanchet in 1926 and is headquartered in Paris, France.

Microsoft had originally purchased Razorfish as part of a $6 billion acquisition of aQuantive in 2007,at a time when Microsoft wanted to do something in the display advertising space more so in response to Google's purchase of Double Click. However 2 years and a downturn economy amidst looming recession has apparently changed microsoft's thinking and it believes that Razorfish, did not seem to fit within Microsoft’s refocused strategy and was not a part of its core focus in the years to come.

Meanwhile Ben Parr of Mashable adds that Publicis has agreed to spend hundreds of millions of dollars in advertising on Microsoft’s web properties, most notably Bing .