Digitas Talking With IPG: Sources

Digitas, the Internet and direct marketing agency based in Boston, is discussing a sale to Interpublic Group of Cos. in New York, sources said.

One plan on the table in the last few weeks, according to sources, is for Digitas to operate as a unit of a restructured Allied Communications Group, IPG’s Cambridge, Mass.-based network — likely to be rebranded Advanced Marketing Services after the restructuring — which houses IPG’s public relations, events marketing and other below-the-line agencies, including Weber Shandwick, Jack Morton, Golin/Harris and Kaleidoscope.

Digitas, which under that scenario would become a key Allied holding and strengthen IPG’s interactive operations, has long been seen as an acquisition target Allied chief Larry Weber.

Executives with Digitas declined comment. Weber did not return calls.

Sources cautioned that numerous client conflicts — Coca-Cola at Interpublic, PepsiCo at Digitas, for example — would have to be worked out, though some synergies would be created, since, for example, both shops already handle General Motors work.

Digitas employs about 1,800 people worldwide and has satellite offices in New York, San Francisco, Salt Lake City, Miami, London and Hong Kong. While faring better than many i-shops — notably marchFirst and Razorfish — during the current economic downturn, the publicly-traded company, controlled by San Francisco investment group Hellman & Friedman, reported a net loss of $23 million last year on revenue of $288 million.