Microsoft Corp. (NASDAQ:MSFT), AOL Inc. (NYSE:AOL) and Yahoo! (NASDAQ:YHOO) have set up an advertising partnership to combat the growing dominance of Google and Facebook’s online advertising.
The partnership, announced on Tuesday, allows each of the companies to sell each other’s unsold premium advertising inventory, also known as display ads, by early next year. Display units are big splashy units that appear on Web pages and attract marketers interested in branding their products or services. Usually, these ads command higher rates.
According to the press release regarding the new partnership, all three are still actively competing with one another for both advertiser spending and publisher partners, as well as maintaining their own set of controls. Under the terms of the nonexclusive agreements, each company will continue to make its own decisions, differentiate its offerings and set its own controls for how it operates any exchanges, ad networks or other aspects of its display businesses.
“We’re thrilled to partner with Microsoft and AOL and bring to market what we believe will be a more efficient, effective and more effortless way to access true premium inventory and formats,” said Ross Levinsohn, Yahoo! executive vice president Americas. “There has a been a significant shift in how inventory is bought and sold, and we’re now 100 percent focused on controlling our own destiny, working directly with marketers and agencies and driving better returns for our advertising partners.”
“Enhancing choice and scale in today’s display advertising market is ‘a rising tide that lifts all boats’,” said Rik van der Kooi, corporate vice president of the Microsoft Advertising Business Group. “This partnership will create an opportunity where advertisers and publishers alike can benefit from easier access to — and demand for — high-quality inventory. The fact that we’re joining together to offer this kind of access to quality — yet each with our own differentiated ad offerings — is something that will benefit the market as a whole.”
“We are excited to be part of this partnership,” said Ned Brody, chief revenue officer, AOL. “Today’s announcement sets in motion the opportunity for advertisers to achieve scaled solutions across premium publishers. This should reduce friction in the marketplace, which will benefit both advertisers and publishers. And this partnership will take our existing Advertising.com partnerships with both Microsoft and Yahoo! to a new level.”
Shares of Microsoft are trading at 26.52 at 10:18 am ET.