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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

August 25, 2008 at 11:54 AM

Report: Microsoft shopping Avenue A to WPP, more to the deal?

Microsoft and global ad giant WPP have been talking for six months about a deal that could sell Microsoft’s Seattle-based ad agency Avenue A/Razorfish to WPP, according to a report in Ad Age.

The article focuses on how Microsoft won’t recoup its purchase price for Avenue A, which was part of its $5.9 billion purchase of aQuantive last year. It says that Microsoft might receive a WPP ad-serving business as part of the deal, covering up a relatively poor return on the agency.

But I’ll bet Microsoft isn’t that concerned about appearances. If it’s spinning off the agency, it’s doing so because it decided it’s non-essential and has better things to do with its resources. Or maybe it really wants WPP’s ad-serving business, because it has a big footprint in China and it’s a key Google customer.

I wonder if the talks could result in a broader partnership between the companies.

Back in February, when Steve Ballmer had his checkbook out, I snarkily suggested Microsoft might be interested in acquiring WPP, especially since Google’s partnering with WPP’s French rival, Publicis.

However it shakes out, I hope the deal doesn’t pull Avenue A out of town.

Comments | Topics: Microsoft

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