AdAge reported that Microsoft and mega-agency WPP have restarted talks that may result in the sale of Interactive agency Avenue A to the latter. Avenue A was part of the $6 billion deal for aQuantive that also included Atlas and the DrivePM ad network.
According to the AdAge article:
Here’s how a deal could unfold, according to people familiar with the discussions: Microsoft unloads the agency in exchange for a WPP package that includes 24/7′s Open AdStream publisher ad-serving tool plus cash. While Avenue A’s price would be higher than most agency deals, very few interactive agencies with that kind of scale are available for acquisition.
The article also points out that 60 percent of aQuantive’s revenues were generated by Avenue A. AdAge cites unnamed experts in asserting that Avenue A is probably worth roughly $800 million. It’s unlikely, however, that Microsoft would be able to get that as part of any transaction.
It’s not entirely clear what’s motivating the potential sale — perhaps the the 24/7 assets that WPP might offer as part of a transaction. Recently Google sold Performics to avoid conflicts of interest (in fact and in appearance). However, potential conflicts of interest appear to be playing a marginal role, if one at all, in the potential sale of Avenue A.