Microsoft Corp.’s giant bet on interactive ad company aQuantive turned out to be more of a lottery ticket, with the company writing off $6.2 billion because of the acquisition.
The company paid $6.3 billion for aQuantive in 2007, in an all-cash deal that included Avenue A/Razorfish. At the time it was seen as Microsoft’s response to Google’s purchase of DoubleClick.
The write-off is in the form of a non-cash, non-tax deductible charge against the goodwill in Microsoft’s Online Services group. It was announced after the market closed Monday and applies to the fourth quarter of Microsoft’s fiscal year.
“While the aQuantive acquisition continues to provide tools for Microsoft’s online advertising efforts, the acquisition did not accelerate growth to the degree anticipated, contributing to the write down,” Microsoft said in a statement. “While the Online Services Division business has been improving, the company’s expectations for future growth and profitability are lower than previous estimates.”
Microsoft, which has a cash reserve of over $50 billion, does not expect this accounting write down to affect its ongoing business or financial performance.
Microsoft – investor relations release
AdAge – Microsoft Admits $6.2 Billion Invested in Online Display Worth Nothing Today
PaidContent – Microsoft writes off most of its 2007 $6.3B ad business bet
New York Times – Microsoft Takes Write-Down in Failed Digital Ad Foray
Bloomberg – Microsoft Writing Down $6.2 Billion After AQuantive Sputters
Microsoft Advertising – http://advertising.microsoft.com
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