Monday, June 29, 2009

Microsoft to Sell Razorfish... Finally!

This morning @LenKendall shared a link to a blurb in the Financial Times reporting that Microsoft is looking to sell off Razorfish (fka Avenue A Razorfish). All I can say is... s'bout time!

This was #9 on the list of things I'd do if I were running Microsoft. As I said last August, "I never understood why Microsoft was able to hang onto Ave A but everyone was up in arms until Google divested Performics. This is a complete conflict of interest. Ave A buys media from Microsoft and builds optimized Web sites for Live Search. I don't care what kind of firewalls you put up between these groups, it's impossible for Ave A to be impartial when creating media plans when its financial health is tied to Microsoft's profit. And vice versa with Microsoft's incentive to help Ave A succeed in the SEO space."

Update 8/10: Per the WSJ, Microsoft has agreed to sell Razorish to Publicis for $530 million. But the conflict lives on...

"As part of the pact, Publicis has entered a 'strategic alliance' with Microsoft, which includes a five-year media-buying relationship. In return for buying a certain amount of display and search advertising on Microsoft properties, Publicis will receive better ad rates."

Looks like Razorfish clients can still expect to see a disproportionate amount of Microsoft reco's on their media plans.


Matt Kain said...

How about a trade with WPP for 24/7 Real Media's network and adserving? Solves perceived conflict on both sides, and gives both something they could use...

(Disclosure - I am ex 24/7 and WPP. I have no knowledge of whether such a deal is or has ever been discussed, but it would certainly make sense)

Aaron Goldman said...

You might be on to something here Matt. Curious as to why you used the word "perceived" though -- do you not think it's a real conflict?

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