In the face of stiff competition from \Google and Facebook.
This Tuesday Microsoft Corp, Yahoo Inc and AOL Inc announced an alliance which will allow each of the three companies to sell each other their unsold premium advertising inventory according to Reuters.
Basically any unsold display ad spaces (big splash banners and expanding ads found on any website) can be traded among the three companies for the entire portfolio of websites that they have. You may think that this alliance will allow for cheaper rates and give each of the three giant companies an unfair advantage, but according to Rik van der Kooi, corporate vice president of the Microsoft Advertising Business Group, that’s not the case.
“We’re not reducing competition in any way, shape or form,” said van der Kooi during a news call. “As a result of transparency, the competition is only going to increase. (We) don’t expect any issues on that side.”
This alliance is obviously formed in the increasing ad presence and market share of both Google and Facebook, who have a pool of 1.6 billion users worldwide. Within the US itself, Facebook is said to have a total online advertising market share of 9.3 percent and Google of 16.3 percent by the end of this year.
“Other players in the industry are welcome to join us. This is not in response to anybody in particular,” van der Kooi added. “The fact that we’re joining together to offer this kind of access to quality — yet each with our own differentiated ad offerings — is something that will benefit the market as a whole.” Time will tell how Google and Facebook will respond to this move, if at all. There certainly cannot be a partnership between these two behemoths as they themselves are competing against each other for the social media space.