Join us at the Digiday Publishing Summit from March 24-26 in Vail
This is as good of a time as any to bury news. So it stands to reason that Microsoft would fess up with just how bad of a deal its 2008 acquisition of aQuantive was. There’s basically no value left, according to the company.
Microsoft wrote down $6.2 billion in value for aQuantive assets, which it acquired in 2008 for $6.3 billion. At the time of the deal, Microsoft was playing catch-up to Google, which had just acquired ad server DoubleClick. At the time, Microsoft’s deal for aQuantive, which it primarily wanted for Atlas, was thought of as merely overpriced. And then some, it turns out.
The write-down is an embarrassing admission for Microsoft, which sold off Razorfish, which was the biggest part of aQuantive at the time of purchase, to Publicis for $530 million in 2009. At the time of the aQuantive deal, Microsoft executives brushed aside the oddity of Microsoft owning an agency, saying Razorfish would help it understand the market better. That didn’t come to pass. And Atlas has struggled to establish itself as a credible alternative to DoubleClick under Google.
The question now for Microsoft is what’s next. Many have waited for it to make a major move in ad technology since Google is seen to be running away with it. Multiple sources have posited that Microsoft is leery of making any move because of the aQuantive debacle, with executives not wanting to be the next one to propose an ad tech deal that others in Redmond will associate with the aQuantive acquisition.
Most of the executives involved in the deal have moved on to other things. AQuantive CEO Brian McAndrews is now a private equity executive. Microsoft online services chief Kevin Johnson left the company for Juniper Networks. Joe Doran, general manager of Microsoft’s digital ad unit, is now CEO of startup Rallyverse. One executive still around is Yusef Mehdi, who at the time was Microsoft’s lead advertising strategist. He’s now chief marketing officer for Microsoft’s Xbox.
More in Media
The Trump tariffs are forcing creators to overhaul their side businesses
The Donald Trump administration’s tariffs, which impose an additional 10 percent duty on Chinese imports, have led to an increase in creators’ business costs.
Brands’ interest in “Grand Theft Auto” is mounting — but questions about brand safety remain
Although it remains unclear whether Rockstar’s stance toward brands will soften for “GTA 6,” the game developer is certainly aware of “GTA’s” power as a distribution network, both for its own products and for outside advertisers.
Media Briefing: Podcasters test different types of paywalls for subscriptions
Podcasters discuss testing out different podcast subscriptions, and how to grow them as a complement (or alternative) to advertising revenue at this year’s On Air Fest event.