Under a new 10-year agreement that starts in 2016, AOL will be taking over a large part of Microsoft‘s display ad sales for numerous sites and services, including MSN, Xbox, Outlook.com and Skype. As part of the partnership, announced Monday, AOL will adopt Microsoft’s Bing as its exclusive provider of search and search advertising services across all of its properties.
In a separate deal, first reported Monday by TechCrunch, Microsoft will also sell some of its mapping-focused Bing assets — including around 100 engineers — to the app-based transportation provider Uber.
Also on Monday, Microsoft announced an expanded partnership with AppNexus, a New York-based firm that provides a technology platform for online ad campaign sales and management. As part of that agreement, AppNexus will become Microsoft’s exclusive technology and sales partner for programmatic ad sales across 10 European markets.
‘One Selling Motion’ for Ads
Working together, Microsoft and AOL will “will create a powerhouse media offering with a remarkable set of differentiated assets,” Microsoft executives Rik van der Kooi and Frank Holland said in a blog post. The partnership introduces “one selling motion” across numerous AOL and Microsoft properties, which will leave both companies “uniquely positioned to deliver more scale of premium inventory and target audiences across display, video and mobile,” according to the companies.
The deal hands AOL responsibility for all of Microsoft’s ad inventory in nine key markets: the U.S., the U.K., Canada, Brazil, France, Germany, Italy, Spain and Japan.
Programmatic marketing has recently emerged as a fast-growing approach for automating the purchase and placement of online and other ads. In April, AOL, which is being acquired by Verizon for $4.4 billion, launched the “One” programmatic ad platform for optimizing campaigns across multiple channels.
“This collaboration further validates our leadership position in digital advertising and the shift to automation, while also allowing Microsoft to focus on what they do best: industry leading services and search innovation,” said AOL President Bob Lord.
‘No Longer Collecting Mapping Imagery’
Last year, Microsoft began a pilot program with AppNexus for programmatic sales in Nordic markets.
“We feel very good about the results — more than 50 percent of business in these markets today is programmatic,” according to Microsoft. The expanded partnership with AppNexus is aimed at taking such ad sales “to the next level” and will give advertisers “programmatic access to more supply of premium, brand-safe Microsoft inventory, while simplifying the buying process and capturing the momentum of explosive programmatic growth in the industry.”
A Microsoft spokesperson told us the Uber transaction was the result of efforts over the past year to focus more on core business strategies.
“In keeping with these efforts, we will no longer collect mapping imagery ourselves, and instead will continue to partner with premium content and imagery providers for underlying data while concentrating our resources on the core user experience,” the spokesperson said. “With this decision, we will transfer many of our imagery acquisition operations to Uber.
All three announcements have arrived on the heels of a memo last week in which Microsoft CEO Satya Nadella spelled out the company’s new mission and described the need to “make some tough choices in areas where things are not working.”
Sources, however, tell us that this week’s announcements reflect Microsoft’s desire to concentrate on its core ambitions and partner with other companies in smarter ways. But they do not signal a move by Microsoft to get out of the advertising business, and the expanded AOL partnership will involve transitioning some sales and marketing employees to AOL rather than significant job cuts.
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