Microsoft is stepping out of the web display advertising business. According to a new report out of Bloomberg, Microsoft will shift the ad operations over to AOL and AppNexus, reportedly cutting 1,200 jobs in the process.
About 1,200 jobs at Microsoft will be impacted, with some positions to be moved to AOL and AppNexus, said the person, who asked not to be identified because the deal hasn't yet been announced. Some people will be offered other positions at Microsoft, while other jobs will be cut, the person said.
Similarly, news broke earlier today that Microsoft would move away from collecting mapping imagery itself, selling some of its Bing assets and transferring 100 of its employees to Uber in the process. All of this follows a company email sent out by Satya Nadella last week, in which the Microsoft CEO said that the company would have to make some "tough choices" going forward as it shifts focus away from areas "where things are not working."
Update: Microsoft has now commented on the partnership with AOL and AppNexus in a new blog post, saying the following:
Bing will now power search and search advertising across the AOL portfolio of sites. This 10-year agreement will enable AOL users to have access to world-class search powered by Bing across the company's global portfolio of sites. Now with 20 percent organic market share in the U.S., Bing continues to grow organically as well as through key partnerships like the one with AOL. This deal with AOL is the latest to validate the quality of Bing results and the performance of the Bing Ads marketplace. Bing is also an integral part of popular first- and third-party devices and services.
In addition to the search partnership, AOL will become our seller of all display formats, including mobile and video, for the Microsoft portfolio across nine markets (Brazil, Canada, France, Germany, Italy, Japan, Spain, United Kingdom and the United States).
With our expanded AppNexus partnership, they will become our exclusive programmatic technology and sales partner in 10 markets (Austria, Belgium, Denmark, Finland, Ireland, the Netherlands, Norway, Portugal, Sweden and Switzerland). Business in these markets will transfer over the coming months, subject to compliance with local law.