Microsoft will take $6 billion write-down for online services division

Microsoft said its acquisition of aQuantive hasn't accelerated growth as much as it hoped

Microsoft will take a US$6.2 billion goodwill charge this quarter to recognize that its online services business won't grow as quickly as it had forecast, the company announced Monday.

Microsoft will book the pre-tax charge for so-called impairment of goodwill, related mostly to its 2007 acquisition of online marketing company aQuantive, it said.

Microsoft bought aQuantive in 2007 for just over $6.3 billion to improve its online advertising business. At the time it was Microsoft's biggest deal ever, though it has since bought Skype for $8.5 billion.

In an acquisition, goodwill reflects the value of intangible assets that can contribute to future growth, such as a strong brand or good customer relations. The write-down shows that Microsoft no longer values the aQuantive assets as highly.

"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.

Parts of its online services business have been doing better, Microsoft noted. Bing's search share in the U.S. has been expanding and revenue per search growing, it said.

"While the Online Services Division business has been improving, the company's expectations for future growth and profitability are lower than previous estimates," Microsoft said in a statement.

It said the non-cash write-down would not affect its "ongoing business or financial performance."

James Niccolai covers data centers and general technology news for IDG News Service. Follow James on Twitter at @jniccolai. James's e-mail address is james_niccolai@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

James Niccolai

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?