This story was written by David Kaplan.
It’s been a few weeks since Microsoft (NSDQ: MSFT) execs met with representatives from various ad agencies to feel out interest in who would want to buy its interactive agency, Razorfish and still no obvious deal, just lots of talk with early September as a target. Take the conflicting reports this past week—Business Insider cited a Credit Suisse analyst who said Publicis’ interest had waned, while the WSJ and Reuters said it was just the opposite.
As we, and others, have reported, Publicis has been the lead contender all along and a variety of agency sources say that the ad firm is intent on making a deal with Microsoft. Although three sources told paidContent that WPP had a cordial meeting with Microsoft execs about what it would it take to move Razorfish out of the Redmond software company’s orbit, a deal appears to be in doubt. Sources were not clear as to why WPP was not able to capture the lead contender spot. Several executives speculated it was a matter of demonstrating who wants Razorfish more, and so far, Publicis has gone to greater lengths to show its desire. For one thing, Publicis executives have indicated that they would be willing to pay upwards of $700 million to acquire Razorfish, while WPP has balked at paying more than $600 million.
It’s easy to get the feeling that these are negotiating tactics and that both agencies are trying to position themselves for an expected announcement from Microsoft about Razorfish’s status by next month, though one source said the decision could be announced just before Labor Day. And Microsoft is looking to attract others beyond Publicis and WPP, if only to maintain its price for Razorfish, which was once considered able to fetch $800 million. Some other possibilities include Dentsu, which was cited by the WSJ, as well as PE firm General Atlantic, preferred by some Razorfish staffers, who fear greater change at the company if acquired by either Publicis or WPP, given their established digital units.
By David Kaplan