Microsoft is taking a $6.2bn (£4bn) charge
on the value of an online advertising firm bought five years ago.
Microsoft bought aQuantive for $6.3bn cash
in an attempt to catch rival Google in the race to grow revenues from
search-related advertising.
The write-down effectively wipes out the
acquisition's value, although there was little impact on Microsoft's share in
after-hours trading on Monday.
The purchase of aQuantive in 2007 was then
Microsoft's biggest acquisition.
The company said in a statement on Monday
that "the acquisition did not accelerate growth to the degree anticipated,
contributing to the write-down".
The charge is likely to wipe out any profit
for the company's fourth quarter. Wall Street was expecting Microsoft to report
fourth-quarter net profit of about $5.25bn on 19 July.
In addition to the charge, Microsoft said
its forecast for future growth and profitability at its online services arm -
which includes the Bing search engine and MSN internet portal - are "lower
than previous estimates."
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