WPP Group plc (NASDAQ:WPPGY) and Microsoft Corporation (NASDAQ:MSFT) are currently in talks about the sale of aQuantive’s Avenue A/Razorfish.  When Microsoft acquired aQuantive, Inc. last year for about $6 billion, the software giant company also absorbed the Avenue A/Razorfish subsidiary.

Avenue A/Razorfish has the ad-serving technology that powers WPP’s subsidiary, 24/7 Real Media.  Microsoft is considering exchanging Avenue A/Razorfish to WPP in exchange for access to 24/7’s Open AdStream services and cash.

“There remains a limit to the available talent that can be hired to pursue the rapid increase in interactive marketing-communications programs that customers are demanding,” stated John Prunier, co-founder of Petsky Prunier,  an M&A advisory company.  “In order to meet that need, agency holding companies and other marketing-communications businesses are going to have to acquire businesses/agencies that possess those skills.”

Of all of aQuantive’s subsidiary companies, Avenue A/Razorfish generates 60% of the revenue.  Given aQuantive’s revenue of $345 million over the last year, Avenue A accounted for about $69 million.  And based on the assumption that digital ad agencies are typically valuated at 10 times the amount of their annual revenue, Avenue A becomes worth close to $800 million.  For that price, it does not become worth selling.  This is why Microsoft is considering sharing assets with WPP rather than just cash and stock options.

To make the deal even more complicated, Yahoo! Inc. (NASDAQ:YHOO) has a multi-year advertising partnership with 24/7 Real Media.  And Google Inc. (NASDAQ:GOOG) also has an advertising partnership with Yahoo!  Throw Microsoft in the mix as a potential 24/7 Real Media partner and that just makes things more interesting for WPP.

Related Link:
1. AdAge

Joanne Bradford, Chief Media Officer of MSN is leaving Microsoft to join Spot Runner.  The MSN network receives 465 million unique users per month.  Before Chief Media Officer, Bradford was corporate VP of Global Sales and Marketing.  She was also the Chief Media Revenue Officer and in 2001, Bradford was VP and Director of BusinessWeek’s advertising sales divison. 

In the meantime, Greg Nelson, a 12 year team member of Microsoft will lead the MSN team.  Nelson was a GM of MSN.com International beforehand.  As of a month ago, Bradford reported to Steve Berkowitz.  Berkowitz will be leaving later this year as well.

Spot Runner was founded by Nick Group and David Waxman.  These two created Firefly Network Inc, a company that Microsoft acquired in 1998.  Firefly had the technology that was used as the foundation for Microsoft Passport. 

Spot Runner is a company to buy 30 second TV ads online.  Investors include Battery Ventures, Index Ventures, WPP, Interpublic Group, and CBS.

[Image credit: Microsoft PressPass]

“At Blast Radius, we advocate to our clients the need to move beyond traditional marketing approaches and treat the web as not just another channel to push polished messages,” stated Gurval Caer, the CEO and President of Blast Radius. “It’s about brands becoming innovative experiences that make people’s lives easier, better, richer. With Wunderman, we will continue to help clients create customer-centric brand strategies but will now be able to do so on a more global basis.”

WPP Group plc (NASDAQ:WPPGY) announced earlier today that they have acquired Blast Radius, a Vancouver, B.C. Canada based company.  Blast Radius is known as being a strategic interactive agency that offers services like experience design, optimization, and technology implementation.  Some of Blast Radius’ clients include Whirlpool, Newell Rubbermaid, and Starbucks.  Blast Radius’ revenues for the year of 2006 was 41.8 Canadian dollars.  That is a lot of Looneys and Tooneys.

Blast Radius also has offices in Toronto, New York, San Fran, Amsterdam, and London.  WPP will align Blast Radius’ services within their own offerings after the closing of the acquisition.  Financial terms were undisclosed.

Last May, WPP Group bought another advertising company called 24/7 Real Media at $649 million.  The Internet is sizzling hot with advertising deals, including the announcement made earlier tonight by Microsoft and Facebook.

24/7 Real Media’s acquisition by WPP Group is truly a valiant move. The dollar amount involved is more than a few pretty pennies. But WPP Group is a big company. The company trades on the London Stock Exchange under the symbol WPP and on the NASDAQ as WPPGY. On the NASDAQ, WPP has a market cap of $18.46 billion.

This is not bad for a company that labels themselves as a communications services group. WPP employs 98,000 people in 2,000 offices in 106 different countries.

WPP announced today that they would acquired 24/7 Real Media in the form of paying shareholders $11.75 per share, thus valuing the transaction at $649 million. Why buy 24/7 Real Media?

Simple. 24/7 Real Media is one of the world’s biggest CPM-based media companies with over 115 million monthly unique visitors. Also 24/7 has some notable partnerships with the likes of British Airways, Expedia, Forbes, Playboy Magazine, The Weather Channel, Google, Yahoo!, and Ask.com.

“Our clients and therefore our industry are becoming more media and technology driven. 24/7 Real Media significantly enhances our capabilities, technological resources and talent, as well as adding to our geographic coverage and our measurable skills,” stated Sir Martin Sorrell, the CEO of WPP.

Management won’t be shuffled around post-transaction, but will be operated under the WPP name. This transaction also terminates the rumor that Microsoft may acquire the company.