Peter Kafka

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Microsoft Tries to Sell Ad Agency It Never Wanted

saleMicrosoft acquired digital ad agency Razorfish two years ago as part of its $6 billion purchase of parent company aQuantive. The industry has been waiting for Redmond to part ways with the ad shop since then.

Now Razorfish is formally on the block: The Financial Times reports that Microsoft (MSFT) has hired Morgan Stanley to hawk the agency and suggests that French ad conglomerate Publicis Groupe could be a buyer. Then again, so could every other big ad holding company, including Omnicom (OMC) and WPP (WPPGY).

The FT throws out a value of $600-$700 million for Razorfish, down from the $800 million price tag that AdAge put on the shop last summer, which was the last time sales chatter heated up. At the time, the buyer was supposed to be WPP. Microsoft paid $6 billion for all of aQuantive in 2007.

Why has everyone been so convinced that Microsoft would sell something it bought in 2007? Because everyone thought that Microsoft never wanted Razorfish–it wanted the rest of aQuantive’s ad network business. And presumably what it really wanted was Doubleclick’s ad network business, but Google (GOOG) beat it out on that deal. Yahoo (YHOO)┬áhad already bought RightMedia and WPP bought 24/7 Real Media. (Boy, a lot of money was spent on ad networks back then! And not coincidentally, a flood of ad network start-ups flooded the market shortly after those transactions went through.)

Meanwhile, Microsoft’s own people have never tried particularly hard to argue that the company was committed to owning an ad agency. Though they did try to argue that owning one wasn’t a conflict with the online publishing business it keeps burning money on. Now that won’t be a problem.

[Image credit: g-hat]