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

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?