Is Microsoft Ready to Shave Off Razorfish’s Conflict of Interest?

When Microsoft acquired aQuantive in 2007, it wanted to bolster its ad network. Unfortunately, it also ended-up with a conflict of interest, as aQuantive came with Avenue A | Razorfish–an ad agency.

Since then, you could argue that about the only good thing to come out of that particular acquisition was the re-branding from the awkward "Avenue A | Razorfish" to the more practical Razorfish. Really, what did Microsoft want with an ad agency anyway?

Well, the FT has yet another rumor–in a long line of rumors–that Microsoft plans to sell off Razorfish.

Microsoft has appointed Morgan Stanley to find a potential buyer for Razorfish, its digital agency…In August, two years after the aQuantive deal, more favourable tax implications will provide an opportunity for Microsoft to sell an asset some view as a conflict of interest with Microsoft Advertising, which sells technology to rival agencies.

So far French marketing firm Publicis appears to be the front runner–with barely a mention that WPP may once again be interested.

So what’s Razorfish worth? Back in 2008, AdAge slapped a $800 million valuation on the agency, but we’re in a totally different economic climate right now, so FT’s $600m-$700m might be more realistic. But, really, that’s just a very small drop in an insanely large Microsoft bucket. Why bother either selling?

Well, that brings us back to the conflict of interest issue again. Microsoft has a renewed focus on its own online advertising sales, and so the time might be right to get rid of any distractions.