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Microsoft Corp.’s Razorfish, an Internet marketing agency whose clients include multichannel consumer electronics retailer Best Buy and Ford Motor Co., will become part of Paris-based Publicis Groupe in a deal valued at about $530 million.
Microsoft Corp.’s Razorfish, an Internet marketing agency whose clients include multichannel consumer electronics retailer Best Buy Co. Inc. and Ford Motor Co., will become part of Paris-based Publicis Groupe in a cash-and-stock deal valued at about $530 million, the companies report.
Razorfish,which shortened its name several months ago from Avenue A/Razorfish, will continue to operate under its brand name as part of VivaKi, a unit of Publicis that offers digital marketing services and also includes marketing firms Digitas, Starcom and ZenithOptimedia.
Razorfish, which says it does not expect to make any personnel changes, will continue to be headed by CEO Bob Lord, who will report to Dave Kenny, managing director of VivaKi. Razorfish employs about 2,000 people worldwide, including about 1,600 in the U.S.
The Razorfish Americas region will continue to be headed by Chicago-based David Friedman, who is responsible for North and South America. Friedman, who has been with Razorfish since 1999, is also responsible for the company’s Global Solutions Group, including the Edge web analytics platform. In prior positions at Razorfish, Friedman has managed practice groups including Consumer Products and Retail.
The Razorfish acquisition, which is expected to close in the fourth quarter and is subject to regulatory review, will help Publicis Groupe media clients by allowing their agencies to purchase web display and search advertising from Microsoft on favorable terms over a five-year term, in exchange for certain minimum guaranteed aggregate purchase levels, Publicis says.
Microsoft will also continue to be a marketing client of Razorfish, and the acquisition agreement provides that Razorfish will continue to be a preferred provider to Microsoft for digital strategy, creative and experiential marketing services. Microsoft in turn has committed to spend a minimum amount for those services each year during the term of the agreement.
"In collaboration with Microsoft, we will be able to develop and provide our clients exclusive, first mover access to new opportunities, programs, content, inventory and experiences,” Kenny says. Other Razorfish clients include McDonald’s Corp. and Starwood Hotels and Resorts Worldwide Inc.
Microsoft acquired Razorfish in 2007 when Razorfish was part of advertising services company aQuantive. The rest of aQuantive is still a part of Microsoft and is known now as Microsoft Advertising.