Dinosaurs Yahoo, AOL and Microsoft Strike Ad Deal to Fend Off Google, Smaller Ad Networks

Yahoo, AOL and Microsoft have banded together in an unholy alliance of sorts. They've announced that they've struck a deal around advertising which will allow them to sell each other's inventory for, hopefully, a more efficient use of ad space and resources.

The idea is to put unsold inventory from any of their properties in a common place and have it filled with ads from each other. It seems a bit like wishful thinking, but it could work in some cases.

Say for example, one of the companies gets a bit order for certain type of ad. It fills its own spots, but still has some left so it looks at what's open on the sites of the other two companies and fills that.

There are a few obvious caveats here, if one company is not able to fill its own inventory, adding more unused inventory doesn't look like a solution. Second, it doesn't really seem that any of these companies is in the position of not being able to fulfill orders all that often.

Still, it's a good strategic move in that it doesn't really cost them anything, it's not an exclusive deal, any of the players can sell their inventory elsewhere, it's a really loose deal.

There are two big reasons why the three companies have struck this deal, three if you include Facebook, but the deal doesn't solve anything related to Facebook.

Microsoft, Yahoo and AOL are targeting Google on the one hand and ad networks and companies on the other. Google is making big progress in display advertising, it's becoming a big player. They now have an united front against the Mountain View company.

And, so far, the three big companies have had to go to third-party ad networks to sell the inventory they can't sell themselves. The hope is that the new deal will mean that they'll have to call on third-party ad networks less often and make more money, together, in the process.