Dive Brief:
- Microsoft and AOL inked a 10-year deal to transfer Microsoft’s display ad business and 1,200 employees to AOL.
- Part of the agreement has AOL dropping its search relationship with Google for Microsoft’s Bing.
- AOL will begin handling sales of display, mobile and video ads on Microsoft properties in the U.S. and eight other markets.
Dive Insight:
Microsoft is basically getting out of the advertising business and adding a new search in a 10-year alliance with AOL. In the deal AOL will begin handling sales of display, mobile and search ads on Microsoft properties in the U.S., U.K., Canada, France, Germany, Spain, Japan, Italy and Brazil, as well as take on 1,200 current Microsoft ad sales employees. The deal includes a search element where AOL will switch allegiances from Google to Bing, a move set to begin in January 2016 and expected to provide an immediate 1% to 2% boost in search at Google’s expense.
The deal allows AOL to serve ads on its own sites, and Microsoft’s sites, including the Xbox gaming console, making its ad packages more attractive to potential advertisers.
AOL President Bob Lord told the Wall Street Journal, “I can go to market now with a pretty comprehensive scale play. We now consider ourselves to be a must-buy.”
Verizon Communications recently acquired AOL for $4.4 billion.
