According to Bloomberg’s Dina Bass Reports, Microsoft is all set to shut down its Web display ad business and handle operations to AOL inc. and AppNexus Inc. The change will impact up to 1,200 people who could be laid off or transferred. The company will also sell some map-generating technology to Uber. Microsoft and Uber did not disclose financial terms of the deal. Uber already uses a combination of map services from Apple, Google and Baidu and will continue to do so.
With the AOL Pact, Bing search engine will power search results and advertising on AOL’s properties for 10 years. For AOL, this Microsoft partnership will give a lot more advertising inventory to work and tries to become a more powerful force in the digital ad industry.
Microsoft is looking forward to focus on its growing search advertising business based on Bing search engine. CEO, Satya Nadella, is sharpening focus on three key areas: personal computing, cloud platforms and business productivity. He said in a Microsoft Statement, “Today’s news is evidence of Microsoft’s increased focus on our strengths: in this case search and search advertising and building great content and consumer services.”
Microsoft is not exiting the ad business entirely as it will continue to sell search ads. “We believe in the advertising model, and we care deeply about those services that are monetized through ads,” said Rik van der Kooi, corporate vice president of Microsoft’s ad business. “But if you look at trends in the industry, it makes complete sense for us to line up with AOL.”
Apart from the nine markets that are covered by AOL partnership, AppNexus will become exclusive programmatic sales partner in 10 other markets such as Austria, Denmark, Belgium, and Portugal. We will continue to update you about all the latest happenings concerning display ad business by Microsoft via our blog.
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