Ad Buyers on AOL-Microsoft-Yahoo Deal: What's in It for Us?

While analysts pan reported pact as too short-term

Apparently applying the “enemy of my enemy is my friend” philosophy, AOL, Yahoo, and Microsoft are reportedly working on a deal to sell each other’s online advertising inventory. But while the plan may help the three tech giants compete with common rival Google, ad buyers say they want to know how the new arrangement could help them.

Citing anonymous sources, the tech blog AllThingsD said that under a “new pact,” the three companies have agreed to sell each other’s “class 2 display” inventory. The plan is that they will share revenue from the ads, with the intent of earning more than they would if a third-party ad network sold the inventory, the report said.

But ad buyers who would potentially buy that inventory said they don’t immediately see how the new scenario is in their best interest.

“We have an ample opportunity to buy this kind of inventory,” said Dick Hurrelbrink, president of Minneapolis-based media agency company Compass Point Media. “If it’s essentially a joining together for their benefit, they’re going to have to demonstrate to us what the benefits are for us and our clients.”

In separate statements, AOL, Yahoo, and Microsoft neither confirmed nor denied the reports.

“We believe that choice, openness and competition help drive innovation in the market.  As such, we are always looking for ways to partner with others in the digital advertising ecosystem to offer innovative solutions that benefit advertisers and publishers. However we have nothing specific to share at this time,” a Microsoft spokesman said in a statement. AOL and Yahoo expressed similar sentiments.

Presumably, the three companies will share more details about the plan, and its advantages for ad buyers, when they formally reveal the pact. But, on first reaction, some media executives said it seemed as though the new deal had a whiff of desperation about it.

“In doing this it seems like they felt it was the only way they could combat the combination of Google’s display and the big ad network industry that’s out there,” said Adam Kasper, EVP of digital investments for Havas Media’s Media Contacts unit. “But from an ad buying perspective, it seems like you’re just slicing the same thing a different way.”

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