In a move to fend off Google, Facebook, and the rapidly proliferating real-time bidding exchanges, AOL, Microsoft, and Yahoo last week made the rumors official: They're joining forces. Where they'd normally hand off leftover online display inventory to an exchange or network, the new agreement allows the three also-rans to share the business among themselves. As part of the deal, advertisers can approach one company to buy from any of the three.
While Yahoo evp of Americas Ross Levinson called the move a "fundamental rethink" of the online ad marketplace, many buyers and analysts characterized it as a fundamental act of desperation. Case in point: Google and Facebook growth in display ad revenues has far outpaced AOL, Microsoft, and Yahoo—eMarketer predicts that Facebook's market share in 2012 (19.5 percent) will nearly match that of all three combined (21.2 percent).
Google and Facebook aside, new RTB exchanges and networks continue to eat into premium display revenue. But they're not worried about this deal. "The alliance brings critical mass and a counterweight to Google, but doesn't have a differentiated offering," Iggy Fanlo, CEO of display and video exchange adBrite, said. "They're kind of just running scared," Joe Casale, CEO of ad network Casale Media, said.
The biggest losers are exchanges that source most of their inventory from AOL, Microsoft, and Yahoo leftovers. Yahoo has already cut off remnant inventory from several retargeting buyers, an industry source confirmed to Adweek.