Microsoft, Yahoo and AOL to sell each others' ad inventory

Microsoft, Yahoo and AOL have entered an agreement to sell each others' ad inventory in a bid to challenge Google's share of the market, according to a report.

Microsoft, Yahoo and AOL: seal ad agreement
Microsoft, Yahoo and AOL: seal ad agreement

The Wall Street Journal's All Things Digital blog has reported that all three companies are going to start selling ad inventory on each other’s sites, which will make them more competitive to both Google and the ad networks.

The have agreed to sell each others' unsold "class 2 display" graphic ads, which would normally be handed over to ad networks. The revenue on the ads will be shared three ways.

The report said the pact was made by Microsoft, AOL and Yahoo executives at a dinner presentation in New York this week.

Microsoft, AOL or Yahoo have all declined to comment directly on the report.

Microsoft said in a statement: "We believe that choice, openness and competition help drive innovation in the market. As such, we are always looking for ways to partner with others in the digital advertising ecosystem to offer innovative solutions that benefit advertisers and publishers."

A Yahoo spokesperson said the company has long standing relationships with Microsoft and AOL and will "continue to partner and compete in the years to come"

He said: "Choice in the digital marketplace is critical. As the media world continues to fragment, Yahoo is committed to ensuring that premium publishers get the value that they deserve.

"We believe strongly in the premium content ecosystem and the importance of matching publishers, agencies and advertisers with premium formats."

In a similar statement to Yahoo, an AOL spokesperson said: "We're fortunate to have long-standing relationships with a large number of premium publishers, including Yahoo and Microsoft.

"We're excited to continue to explore opportunities to expand our relationships. We continue to focus our strategy around premium content and premium publishers and expect to continue investments in these areas moving forward. I will share more with you when it's available."

It is understood that this deal will only be in the US market.

David Graham, head of digital strategy at Arena Media, said that while the reported move is clearly defensive, he is not sure whether it is for the "greater good" of the industry.

He said: "While I can see why these companies would do something like this I would prefer it if they continued to operate independently as it could close down competition and impinge innovation from smaller players in the market."

The news comes in the same week that Yahoo's former chief executive Carol Bartz resigned from company's board.

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