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The official announcement is in: WPP Digital has acquired 75 percent stake in Quasar Media, a subsidiary of the Smile Interactive Technology Group. Quasar provides services in digital media, creative, search marketing and optimization, mobile marketing, among others, and services clients like MakeMyTrip, Monster, Microsoft (NSDQ: MSFT), Motorola (NYSE: MOT), LG (SEO: 066570), Zapak and VISA. It was founded in 2005 and has offices in Mumbai and Bangalore. Quasar, which employs 73 people, reported revenues for the year ended March 31, 2007: Rs 103.6 million with gross assets at the same date of Rs 149.5 million.
Manish Vij, co-founder of Smile Interactive declined to comment on how much the deal is worth. Harish Bahl, CEO and founder of Smile Interactive told me that there are no negatives to this deal – the top management, people and clients remain. At the same time, Quasar gets access to WPP research material, best practices and global technologies. They also get access to WPP clients: “In the domestic framework, we’ll continue to work as is, but we’ll get the benefits of global alliances that the WPP group has. The other thing is that we’re looking to position Quasar as the outsourcing destination for WPP Digital“. But isn’t this too early an exit, given that the digital market in India hasn’t evolved yet? Bahl disagrees – “It’s not an exit. Smile Interactive still has 25 percent stake, which is not less. At a group level, Smile Interactive is 100 percent privately owned, and we’ve not even done a first round of dilution.”