The software-maker and tech giant Microsoft, is handing off some of its digital advertising business to AOL. And at the same time, the company is also selling its street-image mapping operation to Uber.
By taking Microsoft's advertising business, AOL is also taking over other types of advertising that Microsoft ran on its websites and apps, including those on MSN, Skype and Xbox.
In exchange for all that, AOL would make Bing their search engine of choice instead of Google. This gives Microsoft a big share of revenue from advertising that is tied to internet searches performed by AOL.
From the number of AOL's consumers, the deal is giving Bing search a significant boost.
The strategy is Microsoft's way to focus on things that are more relevant to its core business. As Microsoft's Satya Nadella said, he also warned his employees about the needs to "make some tough choices in areas where things are not working."
Microsoft representatives indicated that both the AOL and Uber deals are the results of that strategy.
The Win-Win Solution
Advertising is a good source of income, and it always will be in the hands of those than can manage. But for Microsoft, managing ads is not coming down from its roots. The software maker is not Google, and never will be.
Under its agreement with AOL, Microsoft is handing over its advertising business that has been declined in its priority for years. However, Microsoft do increased its sale in a steady pace when it comes to searches on Bing. But the revenue from advertising, or "display ads," had fall to about $250 million in the second quarter of 2015, or about 15 percent of all Microsoft's ad revenue.
For Microsoft, advertising business is slow. But for AOL, acquiring Microsoft's advertising business means that it's now owning one of the most prominent advertising space in the tech world.
Under the agreement, both companies characterized the deal as a win-win because Microsoft will gain more search advertising, and AOL which has been bulking up its display business, can now add Microsoft's properties to place messages for advertising clients.
For the Uber part, Microsoft did say that the company won't sell its Bing property, or to withdraw any of its parts from the search market.
However, mapping, the technology that is integrated across much of Microsoft's portfolio, and one of the technologies which powers its search feature, is partly sold.
Microsoft's asset sale to Uber has revealed that Microsoft will no longer collecting its own mapping data, and will depend on others in the future.
Microsoft and AOL partnership signals something new inside the tech industry. The two are iconic, yet aging companies in the industry. And by partnering, they are reinventing themselves to become something new, and hopefully to be something 'feared' as they once were.
And to do that, they have to be less arrogant, and keep on changing.
Read: Microsoft is Changing and Makes .NET Framework Open-Source and Cross-Platform
