April 22, 2009 / 8:08 PM / 8 years ago

New Razorfish CEO sees digital shift speeding up

* Microsoft’s Razorfish names Bob Lord CEO

* Current CEO Clark Kokich moves to new chairman post

* Downturn accelerating spending shift to digital

* Executives expect Razorfish to remain within Microsoft

By Paul Thomasch

NEW YORK, April 22 (Reuters) - Microsoft Corp’s (MSFT.O) Razorfish named Bob Lord global chief executive officer on Wednesday, putting him in control of the digital agency at a time when advertising and marketing budgets are under intense pressure.

Lord, previously the president of the U.S. East Coast business, succeeds Clark Kokich, who was appointed to the newly created position of chairman.

Razorfish, bought by Microsoft two years ago, is one of the largest interactive advertising and marketing agencies, boasting a client list that includes McDonald’s Corp (MCD.N), Starwood Hotels & Resorts HOT.N, and Carnival Cruise Lines.

“This is something we’ve been talking about for months,” Kokich said in an interview. “There’s upheaval and change taking place throughout the industry and for us that makes this a great opportunity.”

“The move to digital is accelerating,” he added. “So we wanted to make sure we had the organization in place that we will capitalize on that.”

Kokich, who had served as chief executive since 2007, will help set Razorfish’s strategy and work directly with key accounts as chairman. Lord, who joined Razorfish in 2000, will be responsible for the agency’s day-to-day operations.

The changes, effectively immediately, come during the worst downturn in the advertising business in more than two decades.

Although spending on digital advertising has held up better than on more traditional media such as newspapers, budgets in all media are under pressure. Earlier this week, Yahoo Inc YHOO.O, for instance, said revenue on Yahoo websites from both display ads and search ads fell during the first quarter.

Still, Lord said that the downturn could benefit digital advertising in the long-term. “When you’re working with clients that have smaller budgets now because they’ve been cut, they are coming to the digital agencies and saying, ‘What can you do with less money?'” said Lord.

“When the budgets come back, you’re going to find there is less of the old style of spending because the new strategies have been proven.”

Both executives also said Razorfish was set to remain within Microsoft, dismissing talk that has surfaced occasionally that the software giant would sell the unit.

Microsoft acquired Razorfish as part of a $6 billion takeover of the aQuantive online marketing company in 2007, a period of frenzied consolidation in digital advertising.

(Reporting by Paul Thomasch, editing by Matthew Lewis)

((paul.thomasch@thomsonreuters.com; + 1 646 223-6092; Reuters Messaging: paul.thomasch.reuters.com@reuters.com))

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