Microsoft Takes Write-Down in Failed Digital Ad Foray
Microsoft owned up on Monday to the collapse of its biggest push into digital advertising, announcing that it would take a $6.2 billion accounting charge in its online services division for a failed acquisition.
The accounting charge, called a write-down of good will, was essentially a write-off of the value of aQuantive, a digital advertising company that Microsoft bought in 2007. It will effectively wipe out Microsoft's fourth-quarter profit.
The company said it took the write-down because "expectations for future growth and profitability are lower than previous estimates" for the online services unit.
"It's disappointing, but it is not a shock at this point," said Brendan Barnicle, senior research analyst at Pacific Crest Securities. "The industry has evolved beyond where aQuantive was when Microsoft bought it."
“这让人失望，但目前看来并不令人震惊，” 太平洋皇冠证券(Pacific CrestSecurities)的高级研究分析师布伦丹·巴尼克尔(Brendan Barnicle)说，“这一行业已经出现很大改变，远非微软收购这家公司时的情况。”
Microsoft does make money in online advertising, but has relied on a number of digital advertising partnerships.
The deal for aQuantive was struck when technology and traditional advertising firms were desperately seeking footholds in the world of Internet display advertising. At the time, aQuantive was the biggest company Microsoft had bought in its history.
A month before the aQuantive acquisition, Google, Microsoft's big rival in online advertising, purchased a similar firm, DoubleClick, for $3.1 billion. That deal has been highly profitable for Google, analysts say.
The purchase of aQuantive may well have been driven by pressure Microsoft was feeling at the time, not only from the DoubleClick deal, but by similar acquisitions by other companies. Microsoft bought aQuantive one day after the WPP Group bought 24/7 Real Media, another digital advertising company, for $649 million, and a month after Yahoo agreed to pay $680 million for Right Media, an online ad exchange.
微软很可能是在感受到了外界压力的情况下收购了aQuantive公司。这种压力不仅来自谷歌对DoubleClick的收购，也来自其他公司的类似收购案 。在微软收购aQuantive的前一天，WPP集团以6.49亿美元买下另一家数字广告公司24/7 Real Media。 此前一个月，雅虎公司同意以6.8亿美元收购在线广告交易公司Right Media。
All of the acquisitions were in one or another part of the display advertising business across the Web. Once highly profitable by indiscriminately pasting digital ads across the borders of millions of Web pages, the business has become under pressure as companies like Google got better at aiming for individual tastes with search advertising.
With DoubleClick, Google appeared to be using that personalization technology for the placement of banners and other display advertising.
Google used DoubleClick's huge inventory of Web ads inside AdSense, Google's self-serve ad placement technology for third-party Web sites.
AQuantive was a well-respected online agency based in Seattle, but its focus was on design and client services. The company did have ad inventory and an ad placement engine similar to DoubleClick's at the time, but Microsoft did little to update it.
"It could have been another DoubleClick, but they would have had to know a business where publishers and advertisers meet, and then invest heavily," said Todd Sawicki, chief revenue officer at Cheezburger, a publisher of several popular Web sites.
“它本可以成为另一家DoubleClick公司，前提是他们得了解这个发行人和广告商紧密合作的行业，然后再进行大量投资。” Cheezburger的首席营收官托德·萨维茨基(Todd Sawicki)说。Cheezburger是数家热门网站的发行公司。