Microsoft will take $6 billion write-down for online services division
- 02 July, 2012 22:12
- Comments
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
Recommended
Join the Computerworld Australia group on Linkedin. The group is open to IT Directors, IT Managers, Infrastructure Managers, Network Managers, Security Managers, Communications Managers.
- Bookmark this page
- Share this article
- Got more on this story? Email Computerworld
- Follow Computerworld on twitter
- 2013 Global Information Security Survey: Initial findings
- Enterprise Mobility Management: Embracing BYOD Through Secure App and Data Delivery
- The Future of Knowledge Work
- Managing the Rapid Rise in Database Growth: 2011 IOUG Survey on Database Manageability
- Saving Time and Money with Savvy Use of Flash in Automated Storage Tiering
-
Mobile app data protection not our responsibility, say Australians
-
NBN Co should prepare for Coalition government: NBN committee
-
Google adds more retailers for Chromebook
-
Mobile app data protection not our responsibility, say Australians
-
Opposition calls for inquiry on 457 visas
