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Microsoft Takes $6.2 Billion Charge for Online Ad Move

Monday, 02 Jul 2012 05:22 PM

Microsoft Corp ratcheted back growth expectations for its Internet and search engine unit on Monday as it took a $6.2 billion write-down on the value of an online advertising company it bought five years ago.

The charge will likely wipe out any profit for the company's fiscal fourth quarter, the results of which are expected later this month.

Microsoft bought Internet advertising company aQuantive in 2007 in an attempt to catch rival Google Inc in the race for revenues from search-related advertising.

The $6.3 billion deal was Microsoft's biggest at the time, but it never proved a success. As a result of its annual assessment of goodwill - the amount paid for a company above its net assets - Microsoft said it would take a non-cash charge of $6.2 billion, effectively indicating that the aQuantive acquisition is now worthless.

"The acquisition did not accelerate growth to the degree anticipated, contributing to the write-down," Microsoft said in a statement.

In addition to the write-down, Microsoft said that its expectations for future growth and profitability at its online services unit, which includes the Bing search engine and MSN Internet portal, are "lower than previous estimates".

The company did not immediately clarify what those previous estimates were, as it does not publish financial forecasts.

© 2017 Thomson/Reuters. All rights reserved.

 
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2012-22-02
Monday, 02 Jul 2012 05:22 PM
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