Microsoft, AOL, and Yahoo Partnering

Microsoft, AOL and Yahoo have come to an agreement where online consumers can access advertisements from all three of the companies. This includes advertisements from the Microsoft Media Network (MSN and Fox), Yahoo Network Plus, and AOL’s Advertising.com. Microsoft will now be able to offer broader choices to its advertising customers according to Rik van der Kooi, the corporate vice president for the Microsoft Advertising Business Group.

“Similarly, Yahoo and AOL will now be able to offer Microsoft’s O&O and third party inventory to their own advertising customers, and deliver commensurate value to their publisher partners, as well,” van der Kooi said.

When it comes to display advertisements, they take up a good chunk of the screen you are looking at, and they use animated graphics on the websites so that the ads can be displayed. The second type of internet advertisement is a text-based advertisement. This has text only, no graphics, and is returned within search results.

The number one search engine is Google, which brings in most of its revenue through text-based advertisements, but they also use a display advertisement business. Google is not part of this new deal and Google is not the top display advertisement seller either. There were 1.11 trillion display advertisements shown in the first quarter of 2011 in the United States. One-third of these advertisements were released by Facebook, Yahoo was next with 10 percent, Microsoft was next with 4.8 percent, and AOL came in fourth with 3 percent. With 2.5 percent display advertisements in the United States, Google trails all of those companies in the standings.

There were some interoperability issues that were solved recently, which is why the deal between AOL, Yahoo, and Microsoft was agreed upon.

“Previously, our networks and exchanges didn’t ‘talk’ to each other very well and were unable to effect inventory transactions between parties,” van der Kooi explained. “Now they’ll be able to do just that.”

The Microsoft Advertising Exchange and the Yahoo Right Media Exchange are responsible for the pricing of the display advertisements. The two companies use real-time bidding technology software to determine how much the advertisements should be charged. These inventories can then be resold to ad agencies and advertisers via partners. Under the deal, AOL will have an option to use its own exchange technology instead of those of Microsoft or Yahoo.

The partnership between the three companies works from coast to coast in the United States but a different partnership will be agreed upon for Yahoo and AOL in Canada.

AppNexus is the company who provides the Microsoft Advertising Exchange with a real-time bidding platform, which began in March of 2011. Because of this software, the exchange is spread beyond the United States and Canada to other countries. The United Kingdom, Belgium, France, Germany, Italy, the Netherlands and Spain are the other countries supported by the Microsoft Advertising Exchange program.