Wednesday, 9 November 2011

Microsoft, AOL and Yahoo Join for Online Ad Deal

The three tech giants Microsoft (NASDAQ: MSFT), Yahoo (NASDAQ: YHOO) and AOL are joining hands to sell advertising by pooling their resources, beginning in January. The newly formed alliance will sell leftover ad space but they will continue to maintain their own individual sales teams without appearing to have lost their independence and thereby avoiding scrutiny from antitrust regulators.

The main thrust of this move is to impede the growing popularity of Facebook which is attracting advertisers. Emarketer, a research firm, has ranked Facebook as the leader in US display advertising with a 16% share of online ad market. Google (NASDAQ: GOOG) is already the world’s dominant search engine and it has boosted its popularity and made a foray in display advertising by purchasing DoubleClick in 2008.

From 2% share of the display advertising market in 2008, Google has increased the same to 9% today. During this period, Yahoo’s share fell from 18% to 13%. Microsoft has 5% and AOL has about 4%. With increasing competition from Google and Facebook, the value of ads on Microsoft, Yahoo and AOL have fallen. They are however hoping to push up the price for advertisers for page views.

The alliance between the three tech giants allows them to sell each other’s excess ad space. They said that it was not an exclusive deal and that it would be open to other publishers.

Read More : Microsoft, AOL and Yahoo Join for Online Ad Deal

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