Microsoft, AOL, Yahoo form ad alliance against Google and Facebook

Microsoft, AOL, and Yahoo have announced an advertising partnership to fight against Google and Facebook's dominance in the online advertising arena. The alliance, announced on Tuesday, allows for each of the companies to sell each other's unsold ad inventory by early next year.

Called Display units, these big splashy advertising units appear on web pages and attract marketers in branding their products or services and usually go for a high rate.

"We're not reducing competition in any way, shape or form. As a result of transparency, the competition is only going to increase. (We) don't expect any issues on that side. Other players in the industry are welcome to join us. This is not in response to anybody in particular" stated Rik van der Kooi, corporate vice president of the Microsoft Advertising Business Group.

Microsoft executives, as well as Yahoo and AOL executives, are not expecting any issued from the Department of Justice regarding this partnership. However, critics will argue that this form of partnership can reduce competition or affect advertisement pricing.

Proponents of the partnership argue that this will broaden the potential reach of brand advertisers looking for premium inventory.

Facebook and Google are expected to increase their share of online display advertising by 9.3% and 16.3% respectively while AOL, Microsoft, and Yahoo are expected to loose share as Facebook surpasses Yahoo by the end of this year.

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