Razorfish Deal a Boon to Microsoft and Publicis

by: Andy Beal

In a Razorfish sale, yet to be officially confirmed, both Microsoft and French ad firm Publicis look set to walk away winners.

Microsoft (NASDAQ:MSFT) looks set to recoup $530 million of the $6 billion it paid to acquire aQuantive and, along with it, Razorfish.

Publicis (NASDAQ:PUB) beefs-up its online advertising offering, picks up Microsoft, McDonalds (NYSE:MCD), Google (NASDAQ:GOOG), and Yahoo (NASDAQ:YHOO) as clients, and celebrates its 1-year anniversary of acquiring Performics with another big acquisition.

This should be Publicis’ last big-fish acquisition for a while, according to CEO Maurice Levy, "Don’t expect any acquisitions of this magnitude in the short or medium term." Now Publicis has to figure out how to integrate Razorfish, without losing any of the marquee client accounts, and hope that it can turn around a decline in revenue during the first half of 2009.

Here are the key details:

  • Publicis will hand over 6.5 million existing shares of the company to Microsoft.
  • The remaining $300 million will be paid in cash. Not sure if that’s in dollars, euros, or monopoly money.
  • Assuming the deal doesn’t get tripped-up by regulators, Microsoft will own 3% of Publicis.
  • Razorfish will contribute about $380 million in revenue to Publicis. That may just be "ad spend" which would put Razorfish’s net revenue in the $25 to $50 million range.
  • Razorfish’s 2,000 employees will now enjoy an additional holiday each year–OK, maybe I made that part up!