Microsoft takes $6.2 billion goodwill charge for online unit

Microsoft takes $6.2 billion goodwill charge for online unit

Summary: Microsoft is taking a hefty goodwill writedown for its 2007 purchase of aQuantive. The acquisition didn't deliver the ROI the software giant hoped for.

TOPICS: Microsoft

Microsoft said that it will take a fiscal fourth quarter charge of $6.2 billion to mostly write down its 2007 purchase of aQuantive.

AQuantive was one of that acquisitions designed to bolster Microsoft's ad business. Microsoft said it will take the charge as part of its goodwill impairment test. Goodwill charges arise when a company's fundamental business is lower than the value paid.

Indeed, Microsoft paid $6.3 billion in cash for aQuantive in 2007. The company said in a statement:

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 in its statement that the online services division is on the right track and Bing is increasing revenue per search. The end of Microsoft's fiscal year will provide another opportunity to tally the company's online losses over the last decade.

So far, Microsoft's online unit has lost $8.5 billion over the last 9 years.

Topic: Microsoft

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  • But companies get breaks on a lots of different types of loses

    so is it really as bad as you think?
    William Farrel
    • Yes, it is

      6.2 billion isn't a trivial amount. Odd is the statement that they feel they're doing well with their online division considering this hit added to the ongoing fun and games wrt to losses in the inline unit.
  • So all you Windows Zealots really need to

    Get off Google's case, as Microsof is just as much of an "Ad driven" company. Microsoft is just inept at it, so they've lost $14.8 billion in the last 9 years :p
    Jumpin Jack Flash
    • Weird

      Why do you care so much? Really it's quite sad.