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Google Stirs Competitors for Advertising Sales Competition

30 Sep 2011

Yahoo!, AOL and Microsoft are reported to be working together to sell advertising inventory on each other's sites in an attempt to increase their competitiveness with Google.

The blog site All Things D has revealed that the three companies have agreed to sell each other's "Class 2 Display" ad inventory in the US, which are ads they can't sell themselves and would normally hand over to ad networks.

The blog said: "The theory is that if, say, AOL has a big order for a certain kind of ad impressions, it will fill it with its own inventory as well as with what's available from Microsoft and Yahoo."

Yahoo!7 communications and trade marketing manager Amanda Millar couldn't confirm if the deal had been struck.

"The reports are rumour and speculation," Millar told AdNews.

Initiative Sydney digital director Andrew Davis said the proposal the online giants have stated will be "very difficult to implement without 110 per cent trust and commitment from the top-down".


"You will have three different sales teams representing three very large companies each with their own P/L, getting everyone to play nice from day one is going to be a challenge," Davis said.

"This play is to clearly protect 'premium' online profits they make, they are handing over a lot of their unsold inventory to third-party networks which drops their margin as well as devalues their own inventory, by giving the opportunity for each of their sales teams the ability to include other premium inventory that someone might not have sold that normally would go a third-party network they can make higher margins and protect their 'premium' inventory."

In America, Microsoft already has an Ad Exchange system, a real time ad bidding market place, making the reports of an ad sale deal sceptical. In 2009, AdNews reported that Microsoft and Yahoo! signed a ten year search deal aimed at taking on the dominance of Google, where Microsoft's Bing became the exclusive algorithmic search and paid search platform for Yahoo! sites.

Source: AdNews


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