Could be one of the tough choices Nadella was talking about

Jun 30, 2015 04:32 GMT  ·  By

Microsoft has announced that a segment of its ad business will be transferred to AOL as part of a new partnership that also includes making Bing the search engine provider for all search and advertising services in AOL’s portfolio.

Redmond sees this move as an extension to the original partnership with AOL and AppNexus, two of the companies that were already working with Microsoft in the display ad business and the search industry but that are now taking over the majority of its display ad services.

In a statement today, Microsoft explains that AOL will become its only seller of all display formats, including mobile and video, in nine big markets, namely Brazil, Canada, France, Germany, Italy, Japan, Spain, United Kingdom and the United States, whereas AppNexus will be its exclusive programmatic technology and sales partners in 10 markets, Austria, Belgium, Denmark, Finland, Ireland, the Netherlands, Norway, Portugal, Sweden and Switzerland.

While there’s no official statement in this regard, Bloomberg reports that, as part of this transition, 1,200 Microsoft employees would be laid off sometime this year.

“Tough choices will come”

Microsoft’s CEO Satya Nadella explained in a letter he sent to company employees last week that “tough choices will come,” suggesting that Redmond could continue its internal reorganization and give up on some of the products that are holding it back in some specific industry sectors.

By transferring its ad business to AOL, Microsoft could also try to reconciliation with Google, as reports coming from unofficial sources are suggesting that the company is now seeking a partnership with its long-time rival that could in the end lead to the killing of Windows Phone.

According to these reports, Nadella is considering giving up on Windows Phone in favor of a partnership with Google that would have the search company release some of its key products, such as Maps, on Windows devices, including PCs.

In its turn, Microsoft would switch the focus on devices with Android that could come with its own services pre-installed, in the same way that Samsung Galaxy S6 does it these days.

Needless to say, these are all rumors for the time being, and it’s hard to believe that Redmond is ready to give up on Windows Phone after having pumped millions of dollars into its development and the release of Windows 10 Mobile, but given the fact that it still has a hard time becoming an important player in the mobile industry, nothing’s impossible.