Microsoft writes down aQuantive value
Microsoft has written down the value of online advertising firm aQuantive it bought five years ago by $6.2 billion.
Microsoft bought aQuantive for $6.3 billion in cash in an attempt to catch rival Google in the race to increase revenues from search-related advertising.
The write-down effectively wipes out the acquisition’s value, although there was little impact on Microsoft’s shares in after-hours trading on Monday.
The purchase of aQuantive in 2007 was then Microsoft’s biggest acquisition.
It has since been eclipsed by the company’s $8.5 billion purchase of internet phone service Skype last year.
Microsoft said in a statement on Monday that “the acquisition did not accelerate growth to the degree anticipated, contributing to the write-down”.
Analysts said the write-down came as no surprise to investors.
“aQuantive didn’t work out, but everyone already pretty much knew that,” said Colin Gillis at BGP Financial Partners.
“Now, they are just mopping up.”
The $6.2 billion charge is likely to wipe out any profit for the company’s fourth quarter. Wall Street was expecting Microsoft to report fourth-quarter net profit of about $5.25 billion on 19 July.
In addition to the write-down, Microsoft said its forecast for future growth and profitability at its online services arm – which includes the Bing search engine and MSN internet portal – were “lower than previous estimates”.
Related search articles:
Short URL: http://www.bellenews.com/?p=21127