From my Forbes.com blog The New Persuaders:
Microsoft just wrote off nearly all of the $6.3 billion it paid for online advertising technology firm aQuantive back in 2007. It’s an admission that the purchase, even more expensive at the time than it seems today, hasn’t worked out well–and a stark acknowledgment that its online ad business continues to lag the fast growth of Google and a couple of generations of Internet startups.
In a release, Microsoft essentially concedes that virtually all of the value, or $6.2 billion, of that $6.3 billion acquisition has been “impaired,” in the dry language of accounting. “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 the statement. “While the Online Services Division business has been improving, the company’s expectations for future growth and profitability are lower than previous estimates.”
Since expectations on the outside for the perennially money-losing division already were low, that’s a pretty grim admission–one that belies its recent hopes for a resurgence. …