Publicis Groupe, owner of ad firm Saatchi & Saatchi, said it is buying Microsoft Corp.'s Razorfish advertising agency for $530 million in cash and stock to expand in Internet advertising.
Razorfish will continue to operate under its own name and Microsoft will continue using the agency for online advertising and marketing, the companies said in a joint statement.
In buying Razorfish, Publicis expands its digital-ad business as demand slows for traditional print and television campaigns. The Paris company said last month that first-half revenue fell, hurt by slackening ad spending and the bankruptcy of its client General Motors Corp.
Redmond, Wash.-based Microsoft acquired Razorfish, which designs digital advertising campaigns, as part of its $6-billion purchase of AQuantive Inc. in 2007. Razorfish, whose clients include McDonald's Corp. and Levi Strauss & Co., also works with Microsoft rivals Google Inc. and Yahoo Inc.
In 2008, Razorfish had revenue of about $380 million. Razorfish employs about 2,000 and gets 75% of its revenue from the U.S. It also has offices in China, France, Germany, Spain, Japan, Australia and Britain. Chief Executive Bob Lord will stay with the company, the statement said.