Microsoft is exiting the highly competitive online display ad marketplace, offloading its ad solutions to America Online (AOL), and another display advertising firm AppNexus.
As part of the deal, AOL will replace its default Google search with Microsoft’s Bing search, and will provide programmatic ad displays across a variety of Microsoft online properties. AOL will cover programmatic ads for Microsoft in nine markets, while AppNexus will cover ten other markets including several countries in Europe.
AOL itself was recently acquired by Verizon Communications for $4.4 billion, and its advertising business brings in a significant portion of revenue for a company that is otherwise known for its content platforms through Huffington Post, TechCrunch and other online media. AOL also has a slowly dwindling dial-up Internet business which brings in a good portion of its revenue and profits, but a majority of its revenue comes through display and other online advertising.
AppNexus is a private online advertising firm headquartered in New York City. The company has raised over $140 million in private funding over the past few years, including a $75 million Series D round in January 2013.
Close to 1,200 employees with Microsoft’s online advertising business will be given offers at AOL, or moved to other divisions within Microsoft, according to Bloomberg News.
Microsoft, under new CEO Satya Nadella, has been laser-focused on personal computing, business offerings and its cloud-computing platform, and while it still keeps its Bing and online services running, it appears that those have taken a back seat to its Windows, Office and cloud offerings.