• by Shankar Gupta , August 10, 2005

Interactive shop aQuantive Tuesday reported that second-quarter revenues surged to $77.2 million, representing a 177 percent increase from the second quarter of 2004--largely thanks to the June 2004 acquisition of Razorfish. Net profit was $7.8 million, or 11 cents a share, which was close to flat from last year's $7.5 million, or 11 cents a share.

aQuantive CEO Brian McAndrews said each of aQuantive's business sectors--digital marketing services through Avenue A/Razorfish, digital marketing technology through Atlas, and digital performance media through DRIVEpm and MediaBrokers, all grew their revenue. Digital marketing services grew the most, with revenue of $48.3 million, up from $12.8 million in the second quarter of 2004. The digital performance media sector also continued to be profitable this quarter, posting an operating income of $1.2 million--up from a loss of $374,000 in the second quarter of last year, and a gain of $888,000 in the first three months of this year.

McAndrews said that aQuantive's acquisition of Razorfish in June 2004 widened the company's appeal to potential clients. "With the acquisition of Razorfish, we certainly added a lot of scope and scale," he said. "We have broader capabilities and the ability to look at the digital marketing experience much more comprehensively." McAndrews cited the Web site the company designed for the Mercedes-AMG brand--which was developed by Avenue A/Razorfish--as one of the company's major successes in the last quarter. He also announced that the agency recently won the Hotels.com account.

This quarter, however, Microsoft's MSN announced that they would replace aQuantive as interactive agency of record with Universal McCann. According to an aQuantive spokeswoman, the loss of the MSN business has minimal impact on their overall business. "MSN loss was just for our media business, which was less than 1 percent of our overall revenue," she said. "We're still working with Microsoft on a number of different initiatives."

On the strength of the second-quarter earnings, aQuantive raised its full-year guidance to an expected revenue of $288 million to $298 million, up from the first-quarter estimate of $265 million to $275 million.