In a rather surprising move Microsoft has decided to jump out of the digital ad sales market, signing a deal with AOL to take over Microsoft’s responsibility for sales of display, mobile and video ads across Microsoft properties in the markets of Brazil, Canada, France, Germany, Italy, Japan, Spain, United Kingdom and the United States. Over the past 10 years or so Microsoft has tremendously increased their investments in basically every portion of digital advertising, constantly chasing Google. I guess they finally decided they had better things to do.
What’s important to understand here is the difference between digital ads and search advertising. Digital advertising focuses on partner programs and partner websites. Allowing brands to run a campaign across Xbox, MSN, Windows Messenger, and more. Search advertising focuses specifically on keyword targeted search results and showing related advertising. Microsoft has absolutely no plans to get rid of search advertising. That’s a business that Microsoft states is “sustainable and standalone“.
The AOL deal however does throw some dirt on Google. Under the new deal Microsoft’s Bing search engine will now power search results & search advertising across AOL properties for the next 10 years – a job that used to be assigned to Google since 2002. Granted AOL currently has roughly a 1% market share in the US; however Bing has recently surpassed a 20% market share and this latest deal with AOL will surely help push them along.