Microsoft just announced a new level of partnership with both AOL and AppNexus that signals it’s super close to exiting the highly-competitive display advertising business.

A statement on Microsoft’s blog by Rik van der Kooi, Microsoft corporate vice president of advertising and consumer monetization, and Frank Holland, Microsoft corporate vice president of A&O said:

• Up to 1,200 Microsoft advertising employees will be shifting over to AOL, which will absorb the direct sales of ads across Microsoft’s content sites including MSN in its nine biggest markets, which includes the US and the UK.
• Adtech company AppNexus will become Microsoft’s exclusive programmatic technology and sales partner in 10 markets.
• As part of the deal, Microsofts’ Bing will now power search and search advertising across the AOL portfolio of sites.

Microsoft’s exit from the display ad business has been a long time coming. Microsoft has been slowly shifting its focus away from ad products and towards the imporance of search.

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