Microsoft has struck a deal with AOL to take over its advertising business, reports WSJ. The deal includes sales of display, mobile and video ads on Microsoft properties in the US and eight other markets. The report mentions that all of Microsoft’s ~1200 employees in advertising will be provided with an option to join AOL. Financial details of the deal were undisclosed.
The deal will also include Microsoft’s Bing search engine providing search results and advertising on AOL’s properties for the next 10 years, replacing Google which previously provided AOL with its results. Note that, Microsoft will not exit the ad business entirely as the company will continue to sell search ads.
Exit from mapping: Microsoft also sold a part of its Bing Maps technology to online cab hailing service Uber for an undisclosed amount. Following this deal, about 100 Microsoft employees were expected to join Uber. The company also stopped collecting map data and will instead depend on data licensed from partners like Nokia to continue offering its Bing Maps service. Microsoft said it would instead focus on the user experience of Bing Maps. Read our full coverage here.
Exit from music streaming: In December last year, Microsoft had also sold its MixRadio music streaming service to the Japanese mobile messaging service LINE for an undisclosed amount. Microsoft had inherited MixRadio as part of its Nokia devices and services business acquisition, last year. In July last year, it was reported that MixRadio is set to be spun-off into an independent company, after Microsoft announced plans to cut 18,000 jobs. At the time, MixRadio head Jyrki Rosenberg had told Music Ally that post the spin-off Microsoft and MixRadio will continue to maintain strong links and the app will continue to be preloaded on Windows Phone smartphones.
Changes at Microsoft: MS carried out a major restructuring of its leadership team which included the key exit of Stephen Elop, former Nokia CEO, from the company. Other than this Kirill Tatarinov, president of the Microsoft Business Solutions Division (MBS), Eric Rudder, executive vice president of advanced strategy and Mark Penn, executive vice president and chief strategy officer, also made their exits.
Interestingly, at this time Microsoft also made changes to its various division, combining its OS group and devices group into the single entity Windows and Devices Group. The other two major division left over after other mergers are Cloud and Enterprise and the Applications and Services Group. While the former will develop the company’s cloud platform and enterprise offerings, the latter would work in consumer front technology like in education. It looks like Microsoft intends to focus on these three offerings while selling off or merging its other divisions.
Verizon’s AOL acquisition: Last month, Verizon said it would look to purchase AOL (American Online) in a $4.4 billion all cash deal. The deal, which values AOL at $50 a share, 23% more than its three month average share price, is still pending regulatory approval and is expected to close by August this year. Post acquisition, AOL will become a wholly owned subsidiary of Verizon, while CEO of AOL Tim Armstrong will continue to lead the company.
Other developments at Microsoft:
– Earlier this month, Microsoft announced that the final build of Windows 10 would be available worldwide starting the 29th of July. The operating system will cost $110 for the home edition and $199 for the Pro edition. This will however be applicable only to new users, as pre existing users of Windows 7 & 8 will be able to upgrade to Windows 10 for free.
– The same month, the company acquired 6Wunderkinder, the parent company and creator of the to do list app Wunderlist for an undisclosed amount. In its blog, Microsoft stated that Wunderlist will remain free in all its existing markets and across all its platforms. The pricing of Wunderlist Pro and Wunderlist for Business will not change. Microsoft had also acquired the calendar app Sunrise in February this year and the email app Acompli (for $200 million) in December last year.
– In December last year, Amazon India & Microsoft launched an online branded store. The store would feature the full range of Microsoft products, including the Lumia and Nokia mobile devices, Windows phones and tablets, Xbox One and Xbox 360 consoles, games and accessories, software and other accessories.