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microsoftlogo1-1024x680Microsoft is turning over its display advertising business in the U.S. and eight other markets to AOL as part of an effort focus on search advertising, the company announced this afternoon. As part of the deal, AOL is replacing Google with Microsoft’s Bing search engine and search ad technology across AOL’s sites.

Satya Nadella
Satya Nadella told employees last week that the company would be making some “tough choices”

AOL is expected to offer jobs to about 1,200 current Microsoft advertising employees as part of the deal, according to the Wall Street Journal and Bloomberg News.

“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,” a Microsoft spokesperson said in a statement. “This evolution in our approach to display advertising allows us to keep this focus, while working with industry leaders to market our services.”

Microsoft CEO Satya Nadella told employees last week that the company would be making some “tough choices,” and this appears to be an example of the company focusing on its core strengths. Earlier today, Microsoft announced that it would be selling some of its mapping imagery and data to Uber in a deal that will shift about 100 engineers to the ride-sharing service.

AOL will sell ads for Microsoft properties in the markets of Brazil, Canada, France, Germany, Italy, Japan, Spain, United Kingdom and the United States.

Microsoft executives write in a blog post, “By introducing one selling motion across AOL’s world class portfolio of sites, such as Huffington Post, Engadget, and TechCrunch and Microsoft’s much-loved consumer services, including MSN, Xbox,, and Skype, we are uniquely positioned to deliver more scale of premium inventory and target audiences across display, video and mobile.”

In addition to the AOL deal, Microsoft struck a deal with AppNexus to become the company’s exclusive programmatic (automated) advertising technology and partner in Austria, Belgium, Denmark, Finland, Ireland, the Netherlands, Norway, Portugal, Sweden and Switzerland.

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