Microsoft writes off aQuantive’s $6.2 Billion value, the 2007 acquisition fails to deliver results – Part 1

It is needless to say that Microsoft is one of the pioneers of the personal computing as we know it. However, internet is a different animal to handle and Microsoft does not seem to have the muscle. The company recently wrote off its $6.3 Billion acquisition, aQuantive, in its balance sheets.

The company made the decision on Monday, July 2, in the wake of the enterprise’s lack of productivity and revenues. MS purchased a Quantive back in 2007, for a massive amount of $6.3 Billion that was tipped the most expensive corporate purchase for the estimated return it would offer in the future.

The prediction from web gurus has been bode true as aQuantive has been lacklustre in churning profits for the last four years. The company has lowered down its expectations of profitability in the online advertisements due to the sub-standard performance from the company.

The company stated that it has impaired almost all of aQuantive’s value, $6.2 Billion of the total $6.3 Billion that it paid for its purchase.

“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 the statement. “While the Online Services Division business has been improving, the company’s expectations for future growth and profitability are lower than previous estimates.”

Online advertisement is a different domain and needs to be handled with care and delicacy. However, Microsoft seems to yank the horde with the same stick which does not work in the internet business. There is no doubt that personal computing and operating system, Windows platform, are still their forte and the company has been running a hot streak for more than two decades. The internet business is not the same as local software.

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Posted by Usman Khalid on Jul 3 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.