Microsoft Admits $6.2 Billion Invested in Online Display Worth Nothing Today

Microsoft Focused Efforts on Search in Bid to Compete With Google

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Microsoft has written off nearly the entire value of aQuantive, the ad tech company it bought for $6.3 billion in 2007.

The aQuantive deal was Microsoft's biggest acquisition until the company bought Skype for $8.5 billion last year. It came, too, at a heady time for tech acquisitions. Google had just bought DoubleClick for $3.1 billion, part of a years-long effort to build out the pipes of online advertising.

Microsoft reacted by buying aQuantive, and briefly held a formidable position in ad tech, with a leading ad network (Drive PM), an ad server (Atlas) and its own digital agency (Razorfish).

But while Google focused on display, and particularly the technology that enables it, Microsoft turned its attention to search. Today the company revealed what it really thinks the unit is worth by writing down $6.2 billion related to the deal.

"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 a statement.

In the years since buying aQuantive, Microsoft forged a search partnership with Yahoo and tapped former Yahoo search chief Qi Lu to run its Internet Services division, including online display and search. Mr. Lu's mandate was to make Microsoft's Bing a credible rival to Google and then spearhead the hugely complex migration of Yahoo's search infrastructure to Microsoft's .

It sold Razorfish to Publicis for $530 million in 2009.

In a sign of how little display now means to Microsoft, the Windows unit is planning to roll out the next version of Internet Explorer with Do Not Track automatically turned on, a setting that disables many of the ad capabilities that the team at the former aQuantive worked so hard to build. All that remains as an asset is Atlas, which is also rumored to be on the block.

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