Yahoo, AOL and Microsoft recently announced that they will be teaming up to start selling ad inventory. The new partnership was announced to ad buyers and publishers by the executives of the three companies at an event in Manhattan last Tuesday.
The partnering companies will sell one another’s ad inventory, specifically the ‘Class 2 display’ ad inventory or graphic ads that they can neither sell on their own nor sell to online advertising networks as is typically done.
In the past when a company could not sell their remaining ad impressions they had no choice but sell them to third party ad networks. However, with this new partnership, the three companies will sell the left over ad impressions to each other and in turn bring in increased revenue. The revenue generated from this partnership will be shared equally by the three companies.
For example, if Yahoo has a large order for ad impressions, Yahoo would first fill the order with their own ad inventory. However, if Yahoo is unable to complete the order, they will fill the remainder of the order with the “Class 2 Inventory” of AOL and Microsoft.
This partnership can be viewed as a bold move by the three companies indicating their desperation of recapturing the display ad market shares which Google currently commands about 66% with its massive DoubleClick Ad Exchange and the remaining shares being owned by Facebook in the social space.
The venture is expected to be launched by early next year but will this big ambitious move help the trio unseat, or at least slow down, Google or Facebook? Only time will tell.