Publicis to buy Microsoft's Razorfish digital ad firm

NEW YORK -- French advertising company Publicis Groupe SA has agreed to buy Microsoft's digital advertising firm Razorfish in a move to boost its share of advertising on the Web, according to a joint statement released Sunday.

Under terms of that agreement, Razorfish will continue to be a preferred provider to Microsoft for digital strategy, creative and marketing services and Microsoft has committed to spend a minimum amount for those services each year.

In addition to Microsoft, Razorfish's major clients include Ford Motor, Best Buy, McDonald's and Starwood Hotels & Resorts Worldwide.

Razorfish will continue to operate under its brand name and be part of VivaKi, the new Publicis Groupe entity created in June 2008 to reflect independent operations of Digitas, Starcom MediaVest Group, Denuo and ZenithOptimedia. Razorfish's management team, led by Chief Executive Officer Bob Lord, will remain unchanged.

"The acquisition of Razorfish is another step forward in realizing our strategic vision of building a world leader in digital communications, a critically important space for our clients," said Maurice Levy, chairman and chief executive of Publicis Groupe in a statement. "More than anything, this acquisition should demonstrate that Publicis Groupe now presents a wider pool of resources, talent and expertise that will help our clients market their products or services in a way that takes maximum advantage of the new digital world."

Levy added that when the transaction is completed, about 25% of the company's annual revenue will come from digital communications, up from around 21% currently.