Yahoo, Microsoft, AOL in pact to sell ads

Yahoo Inc, Microsoft Corp and AOL Inc have joined hands to sell advertising online space, in a bid to compete with growing influence of internet search titan Google in the business.

The partnership would allow each of the three companies to sell each other's unsold premium advertising inventory, dubbed as display ads, by early next year in order to achieve the benefits of scale and efficiency.

The alliance will "offer the efficiency of buying premium display inventory at scale," the companies said in a joint statement.

"...Today’s display advertising market is a rising tide that lifts all boats,"  Rik van der Kooi, Corporate Vice President at Microsoft Advertising Business Group, said.

"This partnership will create an opportunity where advertisers and publishers alike can benefit from easier access to and demand for high quality inventory.

"The fact that we are 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," van der Kooi added.

All the three companies have been struggling to increase their market share and have been facing stiff competition from Google, which is most dominating search engine. It further made its position strong in display advertising business, with its 2008 purchase of DoubleClick.

According to research firm EMarketer, Google's share of the display advertising market has increased to 9% this year from 2% in 2008. During that same period, Yahoo saw its share decline to 13% from 18%, Microsoft has 5% and AOL has about 4% stake.

Besides, the three companies indicated that they would retain their independence and compete against each other with separate sales teams.

"Each company will continue to make its own decisions, differentiate its offerings and set its own controls for how it operates any exchanges, ad networks or other aspects of its display businesses.

"They will actively compete with each other for both advertiser spend and publisher partners based on their own unique product differentiators," the statement said.