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Microsoft exits display ad market and sells mapping assets to Uber

On Monday, two separate but equally major pieces of Microsoft news broke. Both components have major implications for the future of the software giant. Firstly, Microsoft sold several components of Bing’s mapping unit to the ride-sharing/taxi startup Uber. Secondly, the Seattle company is reportedly shutting down its display ad network. Quite a day.

Uber-logo Microsoft exits display ad market and sells mapping assets to Uber

The move to sell Uber components of Bing’s mapping unit seems to be of much less consequence to the overall operation of Microsoft. It is important to note that this is just a sale of assets, a small amount of assets at that. Bing Maps and Bing proper are still a part of Microsoft, and if we are to believe the Microsoft statements of the past few years, they will be for the foreseeable future. Further, Alex Wilhelm of TechCrunch – who is always spot on with Microsoft news – speculated on the motives in the absence of any statements, official or otherwise:

My guess, therefore, is that Microsoft is selling a chunk of its image collection to Uber, and that it will retain licensing rights thereof. Also I presume that Redmond is selling off part of its bucket of intellectual property to Uber in the deal.1

The Uber deal, though there were no exact terms disclosed, also includes the transfer of 100 employees from Microsoft to Uber. This seems to be little more than a move to free up some resources for the Bing team. The second bit of news, however, has larger implications for the future of the Seattle company.

Aol-AppNexus Microsoft exits display ad market and sells mapping assets to Uber

Microsoft is essentially exiting the display ad business. In what they are calling a partnership, Microsoft announced that AOL will take over the sales of all ads on the Microsoft display network and they are also ceding a large portion of ad and technology sales in several foreign markets to AppNexus:

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).2

On the other side of the agreement, AOL will now power all of its searches, across all of its global sites and properties with Bing for the next ten years. In a side-note, the press release noted that Bing now has “20 percent organic market share in the U.S.”3 This number is sure to rise as soon as Bing is integrated into Huffington Post, Engadget, Adap.tv and TechCrunch.

Both of these moves seemed aimed at making Microsoft a more lean, faster organization. This is clearly in line with the company’s new(ish) focus on mobile, cloud computing, personal computing, and business productivity. By giving up control of their ad network, Microsoft increased the reach of Bing. By selling off and then licensing their own mapping/imaging technology, the reduced costs and made Bing a leaner organization.