Microsoft Drops Ad Business

Microsoft Corp that it will hand over its display advertising business to AOL Inc and sell some map-generating technology to ride-hailing app company Uber, as it scales back on unprofitable operations.

The moves mean Microsoft will focus on its growing search advertising business based on its Bing search engine, and displaying maps on its Windows devices rather than generating the maps themselves.

Microsoft, which employs hundreds of people in its display ad business around the world, said those employees would be offered the chance to transfer to AOL and that it was not making any layoffs.

The world’s largest software company no longer breaks out results for its online operations, chiefly its MSN web portal and Bing, but they have lost more than $10 billion over the past five years. Chief Executive Satya Nadella has said Bing will turn a profit next fiscal year.

“Today’s news is evidence of Microsoft’s increased focus on our strengths: in this case, search and search advertising and building great content and consumer services,” saidMicrosoft in a statement.

Under a 10-year deal struck with AOL, now a unit of Verizon Communications Inc ,AOL will sell display ads on MSN, Outlook.com, Xbox, Skype and in some apps in major countries. As part of the deal, Bing will become the search engine behind web searches onAOL starting next year.

Microsoft also struck a multi-year extension to its existing deal with AppNexus, which provides the tech platform for buyers to purchase online ads.

Microsoft and Uber did not disclose financial terms of their deal, under which Uber will take over the part of Microsoft’s mapping unit that works on imagery acquisition and map data processing. Uber will offer jobs to the 100 or so Microsoft employees working in that area, according to a source familiar with the deal.

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Yahoo Goes-DO NOT TRACK

Yahoo websites worldwide will comply with users “do not track” settings starting later this year, Yahoo announced Wednesday.

Most major browsers are now able to send a message to sites visited, indicating whether users want their surfing behavior to be tracked by cookies for the purposes of displaying personalized ads. In February the last major hold-out, Google, announced that its Chrome browser will include do-not-track support by the end of the year.

That message, an HTTP (hypertext transfer protocol) header accompanying a request to display a Web page, avoids the awkward paradox that to store a visitor’s preference not to be tracked by cookies, sites had to store a cookie containing that preference, and provides a consistent way to store and indicate such preferences across all Web sites that respect the do-not-track header.

Support for the do-not-track header has been in the works since last year, Yahoo said. All Yahoo sites will respect the header, including those of Right Media and Interclick, two Yahoo subsidiaries specializing in behavioral or data-driven advertising, the company said.

The company’s announcement comes the same day that the U.S. House of Representatives’ Subcommittee on Commerce, Manufacturing, and Trade is set to hold a hearing on balancing privacy and innovation, and in the same week that the U.S. Federal Trade Commission called for creation of a do-not-track tool for Internet users.

In a statement announcing its plans for allowing visitors to opt out of tracking, Yahoo maintained that allowing advertisers to regulate themselves was the best and quickest way to introduce protections to the market place without sacrificing innovation or value creation.

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Did Google Increase Microsoft’s Ad Rates?

Google might have increased Microsoft’s ad rates 50 fold, a Bloomberg report says.

Someone familiar with the matter told Bloomberg that the US Federal Trade Commission (FTC) is looking into the rate increase.

It will also be looking into other allegations against Google about advertising as a result of complaints from Microsoft.

This is part of a larger antitrust probe into Google that began earlier this year, the source told Bloomberg.

An antitrust lawyer at Doyle Barlow & Mazard PLLC in Washington, Andre Barlow, told Bloomberg that, if true, the Microsoft allegations could be used to help the FTC build a case showing that Google has abused its power as the owner of the world’s most popular search engine, violating the Sherman Act and other antitrust laws.

He said, “A lot of this conduct, when put together with a firm with market power, could be viewed as a violation” of antitrust laws.

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Facebook Is Display Advertising King

Facebook’s U.S. advertising revenue will reach roughly $2.2 billion in 2011, toppling Yahoo Inc to collect the biggest portion of online display advertising dollars, according to a new study.

Facebook’s U.S. advertising revenue will give it a 17.7 percent share of the market for graphical display ads that appear on websites, according to a report released on Monday by research firm eMarketer.

Last year Facebook garnered 12.2 percent share of the U.S. market.

The figures highlights the growing clout of Facebook, the world’s No.1 Internet social network. It has seen its valuation soar to roughly $80 billion in recent transactions for its shares on the private markets as some investors anticipate it could have an initial public offering next year.

While Facebook has grabbed the top ranking, eMarketer analyst David Hallerman said the overall market for display ads, which include banner ads, video ads and Web page sponsorships, is growing robustly enough that it is benefiting numerous companies.

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