Week in a Nutshell #25

Welcome to the twenty-fifth episode of the 'Week in a Nutshell’ series,

It was another slow week for the tech world due to the 4th of July in the US. Microsoft's exit decision from the display advertising business was the highlight of the week.

Headlines:

  1. Here's why Microsoft is exiting the $74 billion display advertising business


Here's why Microsoft is exiting the $74 billion display advertising business

Microsoft announced that AOL and AppNexus will take over its display, mobile and video advertising sales and operations. As a part of this deal, AOL and all the other AOL owned web properties such as AOL.com, Huffington Post, TechCrunch and Engadget will replace Google search with Bing search as their default in-site search engine for the next 10 years.

According to eMarketer analysis, global display advertising market is around $74 billion and Microsoft's share in this market has been declining for the last couple of years. eMarketer claims Microsoft used to have 2.1% of market share in 2013. But, eMarketer estimates Microsoft's share will drop down to 1.2%, which is equal to $880 million by the end of this year. Considering the relatively low market share in the display advertising market, Microsoft did the right thing with its exit decision. 

Microsoft has struggled against the digital advertising giant, Google AdWords, especially in the display, mobile and video ads verticals. Thus, Microsoft's exit decision from the display advertising market could raise the question of "Will Microsoft exit from the overall digital/online advertising market?". However, Microsoft stated that it will keep its focus on Bing search engine and the search advertising. As of March 2015, Bing has 20% of the search engine market share in the US market. This new deal with AOL will make Bing the default in-site search engine across all AOL web properties and it could help Bing to increase its search engine market share with one or two percentage points.


We came to the end of the twenty-fifth episode of ‘Week in a Nutshell’ series. Please comment, share, like and/or recommend this post if you enjoyed it.

Thanks,
Birkan