Microsoft, Yahoo!, and America Online have combined their advertising might to battle the companies with the most advertising revenue - Google and Facebook.
The idea behind the companies’ alliance will be through their advertising of space on their individual websites; instead of trying to sell their own premium ad space, they will allow their new allies to do it for them.
"The agreements will allow ad networks operated by Yahoo!, Microsoft and AOL to offer each other's premium nonreserved online display inventory to their respective advertising customers," said Microsoft in a prepared statement.
This would make it much easier for potential customers to get ad space on a desirable website. Now, if Yahoo has no more space for a particular advertiser, the company can redirect the ad to Microsoft or AOL. From a business standpoint, it is a better solution than simply forfeiting those profits altogether.
The coalition came as a response to the past few years, in which Google and Facebook have essentially taken over the majority of advertising. Google has become the household name for search, and users spend hours on Facebook, subjecting themselves to loads of ads. Other sites just can’t compete.
At least until now.
Facebook and Google also suffer from the same problem, albeit on a much smaller scale. They are never able to fit in every single advertiser that wants to use the website.
The way Microsoft and its partners see it, the fact that their ability to satisfy product promoters should give them a boost in profits; after all, what company wouldn’t want to buy (virtually) guaranteed high-traffic space for their ad?
"Simultaneously, the partnership should enhance the demand for and value of each party's display advertising offerings as well as provide better yield for both participating publishers and advertisers," said Microsoft.
It is currently unknown if Microsoft, Yahoo!, or AOL have planned to raise their prices after announcing the deal.