Microsoft Expected to Post Shock Loss After £4bn Advertising Firm Flop

By Gary Cutlack on at

Cash machine Microsoft could be about to post a quarterly loss in the next week or two, after admitting its purchase of advertising firm aQuantive was an almighty £4billion balls up.

Microsoft paid an astonishing $6.3bn (£4bn) for the ad company back in 2007, which it promptly re-branded as the catchy Microsoft Advertising department, in a bid to compete with Google in the global ad market. That has clearly been an almighty financial disaster for MS, which last night announced plans to write off $6.2bn of that initial investment, giving the acquired business a valuation of virtually nothing in today's tech terms.

Analysts expected Microsoft to post a $5.3bn profit for the quarter that ended on June 30th, so this loss may push the software giant into the red. However, given that everyone already knew the buy was an enormous flop, the writedown had little impact on Microsoft's share price yesterday. [BBC]