Microsoft in $6.2bn write-down of advertising service aQuantive

Microsoft has written down the value of aQuantive - the online advertising firm it acquired in 2007 - by $6.2 billion (around £4 billion).

The scale of the downgrade is plain given the $6.3 billion sum the company parted with in the deal, and the effective wipe-out of aQuantive’s acquisition value demonstrates the partnership’s overall failure.

The purchase was made as part of the software giant’s master-plan to challenge rival Google, with aQuantive drafted in to boost revenue from search-related advertising on the Bing platform. The $6.2 billion deal was a company record at the time, but was trumped last year by the whopping $8.5 billion buy-out of messaging and call service Skype.

Microsoft said in a statement, “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 does not expect this accounting write down to affect its ongoing business or financial performance.”

Founded in 1997, US-based aQuantive was ranked 14th in terms of revenue among advertising agencies worldwide, in a list compiled by Advertising Age magazine. Such acclaim saw its stock rise remarkably ahead of the Microsoft deal, but yesterday’s write-down confirmed the widely-accepted failure of the collaboration.

Microsoft nevertheless claims Bing has increased its share in the US market, while its “revenue per search has been growing".