Under a new 10-year agreement that starts in 2016, AOL will be taking over a large part of Microsoft’s display ad sales for numerous sites and services, including MSN, Xbox, Outlook.com and Skype.
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Microsoft Corp is handing off some of its digital advertising business to AOL Inc and selling its street-image mapping operation to Uber Technologies Inc, as the giant software company tries to focus on activities more relevant to its core business.
Microsoft is keen to divest itself of non-core interests as part of a business strategy devised by CEO Satya Nadella which will see it focus on personal computing, cloud platforms and business productivity.
The companies commented that both of them will have an equal partnership on revenue earnings from ads sold on each other’s products, as per a revenue-sharing arrangement; the terms of which have not been revealed. An AOL spokeswoman said the online media company will extend job offers to all 1,200 people who worked in Microsoft’s advertising business. (NASDAQ:YHOO) towards the end of previous year.
Taken together, the moves make Bing far more competitive with Google, whose desktop search share in the U.S.is now down to 60%. “We now consider ourselves to be a must-buy”, AOL executive VP and president Bob Lord tells Shields and Ovide. Both companies will enable AOL users to access a world-class search experience across all screens. This news, combined with Bing’s market share of 20% after years of competition, may seem bad for Bing on first glance.
“We’re excited about the talent and technology this acquisition brings”, said an Uber spokesperson.
Microsoft (NASDAQ:MSFT) is admitting its past online failures and dramatically cutting headcount while doing Google (NASDAQ:GOOG) (NASDAQ:GOOGL) a huge favor in refocusing on its Bing search engine.
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Ride-hailing service, Uber is already shaking up its business worldwide and is already using a bunch of mapping services from Apple, Google and from China’s Baidu. On top of purchasing the technology behind Bing Maps Uber is also picking up one hundred of the Microsoft engineers that now work on Bing Maps.
