Microsoft takes US$ 6.2-bn charge as its Internet hopes slow down
Microsoft Corp on Tuesday announced a US$ 6.2 billion charge to write down the value of an online advertising agency it bought five years ago.Updated: Jul 03, 2012 23:06 IST
Microsoft Corp on Tuesday announced a US$ 6.2 billion charge to write down the value of an online advertising agency it bought five years ago.
The announcement came as a surprise, but did not shock investors, who had largely forgotten that Microsoft bought aQuantive for US$ 6.3 billion in 2007. The buy was initially expected to boost Microsoft’s online advertising revenue and counter rival Google’s purchase of digital ad firm DoubleClick.
Microsoft’s shares dipped slightly to US$ 30.28 in after-hours trading on Nasdaq, after closing at US$ 30.56 in regular hours.
The company said “the acquisition did not accelerate growth to the degree anticipated, contributing to the write-down.”
The charge will likely wipe out any profit for the company’s fiscal fourth quarter. Wall Street was expecting Microsoft to report net profit of about US$ 5.25 billion for the quarter.
In addition to the write-down, Microsoft said 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”.