The sale of Razorfish comes two years after Microsoft acquired the digital agency as part of its $6bn acquisition of online advertising group aQuantive in 2007.
To fund the cash and share deal Publicis will issue 6.5m treasury shares to the software giant with a value of $232.6m.
In addition to the deal the two will form a strategic alliance, which will see Microsoft continue to work closely with Razorfish.
Maurice Levy, chairman and chief executive officer of Publicis Groupe, said: "The acquisition of Razorfish is another step forward in realizing our strategic vision of building a world leader in digital communications, a critically important space for our clients.
"More than anything, this acquisition should demonstrate that Publicis Groupe now presents a wider pool of resources, talent, and expertise that will help our clients market their products or services in a way that takes maximum advantage of the new digital world.
"Our capabilities will be further enhanced by the great talent throughout Razorfish, and we are happy to welcome this new addition to our family."
Levy added that when the deal was completed in the fourth quarter around a quarter of the revenues of the French ad group, which was the frontrunner to buy Razorfish, will come from digital communications.
Steve Ballmer, Microsoft's CEO, said, "We look forward to continuing to work with Razorfish as one of our agencies, and we're confident that as a part of Publicis Groupe, Razorfish will build on its success to date in the digital advertising industry."
Razorfish will continue to operate under its brand name and organisationally be part of VivaKi, the new Publicis Groupe unit created in June 2008. Razorfish's management team, led by CEO Bob Lord, will remain in place.
David Kenny, managing director of VivaKi, said, "We pursued this acquisition based on its potential to deliver client benefit.
"The addition of Razorfish to the VivaKi portfolio gives us a wider and more diverse platform of capabilities which will convert to optimal service offerings and other opportunities for our clients.
"Moreover, in collaboration with Microsoft, we will be able to develop and provide our clients exclusive, first mover access to new opportunities, programs, content, inventory and experiences."
The strategic alliance builds upon the broad strategic cooperation agreement announced in June between Microsoft and Publicis Groupe.
The agreement is designed to help Publicis media clients by allowing their agencies to purchase display and search advertising from Microsoft over the five-year term of the agreement on favourable terms, in exchange for certain minimum guaranteed aggregate purchase levels.
The agreement also sees Razorfish continue to be a preferred provider to Microsoft for digital strategy, creative and experiential marketing services, and contains a commitment by Microsoft to spend a minimum amount for those services each year during the term of the agreement.
Major clients of Razorfish include Best Buy, Ford, McDonald's, Microsoft, and Starwood Hotels.
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