Microsoft is stepping away from the online advertising business having struck a deal with AOL that will see it take over sales of display, mobile and video ads. All of Microsoft’s 1,200 ads staff are being offered jobs at AOL.
In related news, Uber is to take over Bing’s mapping unit, with 100 staff transferring to Uber.
The deals could be part of the greater transition in Microsoft’s strategy under Satya Nadella to focus on core competencies. Last week, Nadella issued a new mission statement that will see Microsoft attempt to empower every single person and organisation on the planet – clearly digital media is a distraction from this focus.
Last week Nadella warned of “tough choices” ahead for Microsoft and it is clear this is one of them.
Bing, bang, bosh …
As part of the deal, Microsoft’s Bing search engine will replace Google to power search results and advertising on AOL’s properties for the next 10 years.
AOL was recently acquired by US telecoms giant Verizon for US$4.4bn.
The deal appears to be a win-win for AOL as it gives the company access to a broader ad inventory that includes Microsoft’s MSN web portal and Xbox gaming consoles, not to mention the anticipated acceleration in Windows Phone devices once Microsoft’s Windows 10 product strategy unfolds.
As part of the broadening Silicon Valley trend of acqui-hiring, ride-sharing app Uber is also snapping up pieces of Bing.
Uber will acquire assets from Microsoft Bing including 100 employees focused on Bing’s image collection activities to bolster its own mapping work, especially around 3D, aerial and street material.
The future of advertising is programmatic
“Microsoft and AOL share a commitment to customer service and collaboration, and together we will create a powerhouse media offering with a remarkable set of differentiated assets,” Rik van der Kooi, Microsoft corporate vice president of advertising and consumer monetisation said.
“By introducing one selling motion across AOL’s world-class portfolio of sites, such as Huffington Post, Engadget, Adap.tv and TechCrunch, and Microsoft’s much-loved consumer services, including MSN, Xbox, Outlook.com, and Skype, we are uniquely positioned to deliver more scale of premium inventory and target audiences across display, video and mobile. “
The keyword to watch in all of this is “programmatic”, which will define the future of pretty much all ad inventory managed online in the very near future.
“With our expanded AppNexus partnership, they will become our exclusive programmatic technology and sales partner in 10 markets (Austria, Belgium, Denmark, Finland, Ireland, the Netherlands, Norway, Portugal, Sweden and Switzerland). Business in these markets will transfer over the coming months, subject to compliance with local law,” van der Kooi said.
“Today, AppNexus is the lead technology partner for our programmatic business, across 39 different markets around the world. Last year, we started a pilot program in the Nordic countries to take those markets to a fully programmatic sales motion. We feel very good about the results – more than 50pc of business in these markets today is programmatic and we’re taking that to the next level with today’s announcement across the 10 markets.
“The expansion of our partnership 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.”
Bing image via Shutterstock