Earlier this year we asked Jeff Lanctot, an exec at Avenue A/Razorfish, why it made sense for Microsoft to own his company, purchased as part of the $5.9 billion aQuantive deal last year. He couldn't come up with a convincing answer. Now Microsoft seems to have reached the same conclusion.

The problem, says Advertising Age, is that Microsoft (MSFT) is reluctant to part with the ad agency for a market value price -- about $800 million, or roughly 10x Ebitda -- because that would mean admitting that it overpaid for aQuantive to begin with.

We're not sure we follow that logic -- at the time of the deal, everyone understood that 1) Microsoft was interested in everything but Avenue A when it made the deal and that 2) Microsoft was making a panic buy after losing DoubleClick to Google (GOOG). So of course it was overpaying. We're not sure how sloughing off Avenue A now makes that any worse.

In any case, Ad Age says, Microsoft may have found a face-saving solution some kind of swap with ad giant WPP:

According to several people in the ad-serving industry, WPP is interested in unloading Open AdStream, the ad-serving business it acquired in its $649 million purchase of 24/7 Real Media -- another deal in which the acquirer was criticized for overpaying. Out of the 24/7 deal, WPP got a large search-engine-marketing business with a concentration in China, which served to make group Chief Executive Martin Sorrell Google's biggest customer, as he has noted several times since, as well as to bolster WPP's stake in the fast-growing Asia market. It also got an ad network, which serves as the basis for an automated media-buying system in which it is tapping into ad exchanges.

But having a publisher-side ad-serving tool is seen as less integral within WPP, so it has become a bargaining chip to get something the group would rather have: Avenue A/Razorfish.

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