AOL and Microsoft have signed a deal that gives AOL responsibility for the majority of Microsoft's display advertising. Microsoft said Monday it will shutter most of
its display advertising business and hand over parts to AOL and AppNexus.
The deal means that AOL, recently acquired by Verizon, will sell all display formats such as mobile and video for the Microsoft portfolio across nine markets including Brazil, Canada, France, Germany, Italy, Japan, Spain, United Kingdom and the United States.
Handing off the direct sales efforts for advertising means that AOL will offer jobs to about 1,200 Microsoft employees as part of the deal. Microsoft doesn't expect to lay off any employees.
Despite the dramatic cutbacks in its advertising, Microsoft will continue to sell search ads, which has seen market share and revenue rise. The two companies also signed a 10-year agreement for Microsoft to serve organic search results and paid-search ads across AOL properties. The deal makes Bing the default engine on AOL beginning Jan. 1, 2016, replacing Google as the default engine.
Bing has seen its share of global search ad revenue rise in the last few years, growing from 3.7% market share in 2013 to 4.2% in 2014, according to eMarketer. The data firm estimates Bing's global search ad revenue will remain at 4.2% this year.
The overall search ad market reached $70.18 billion in 2014, and should rise to $81.59 billion this year, estimates eMarketer.
Separately, Uber will acquire assets from Microsoft Bing, including 100 employees focused on the product image collection, and intellectual property licenses, software, and physical goods such as camera. The deal means Uber will hire data-collection engineers from Microsoft to build its own mapping software.
"Over the past year, we have taken many actions to focus the company's efforts around our core business strategy," said a Microsoft spokesperson. "In keeping with these efforts, we will no longer collect mapping imagery ourselves, and instead will continue to partner with premium content and imagery providers for underlying data while concentrating our resources on the core user experience. With this decision, we will transfer many of our imagery acquisition operations to Uber."
The move cements Uber's ambition in building out its mapping technology. The company said it made the move to decrease its reliance on licensing software from others.