Microsoft has written down the value of an online advertising firm it bought
five years ago by $6.2bn ( 4bn).
Microsoft bought Aquantive for $6.3bn in cash in an attempt to catch rival
Google in the race to increase revenues from search-related advertising.
The writedown effectively wipes out the acquisition's value, although there was
little impact on Microsoft's shares in after-hours trading on Monday.
The purchase of Aquantive in 2007 was then Microsoft's biggest acquisition.
It has since been eclipsed by the company's $8.5bn purchase of internet phone
service Skype last year.
Crisis jargon buster
Write-down
Reducing the book value of an asset, either to reflect a fall in its market
value (see mark-to-market) or due to an impairment charge.
Microsoft said in a statement on Monday that "the acquisition did not
accelerate growth to the degree anticipated, contributing to the writedown".
Analysts said the writedown came as no surprise to investors.
"Aquantive didn't work out, but everyone already pretty much knew that," said
Colin Gillis at BGP Financial Partners. "Now, they are just mopping up."
The $6.2bn 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 writedown, Microsoft said its forecast for future growth and
profitability at its online services arm - which includes the Bing search
engine and MSN internet portal - were "lower than previous estimates".