According to a press release from AT&T, Microsoft is now the proud owner of its former digital media advertising solution, Xandr.
While the price and terms have not yet been disclosed, the overall deal has become public and puts an exclamation point on AT&T’s bid to become a digital advertising platform.
Back in 2018, AT&T acquired AppNexus, which went on to become Xandr, for $1.6 billion in an attempt to compete with the Facebook and Google’s of the advertising industry.
AT&T looked to leverage its wireless subscriber base and its TV ad space with content produced from brands such as CNN, TNT and Warner Media as a way to gain a foothold in the advertising space.
However, the initiative was mismanaged and ultimately become a financial albatross on the AT&T’s finance sheets to the tune of $50-90 million in losses annually.
The move to drop Xandr follows Verizon’s shedding of its Yahoo media unit to private equity firm Apollo Global after a similarly botch effort to become an advertising platform.
For Microsoft’s part, it will be taking on Xandr as an addition to its current advertising platform and perhaps, a replacement of its $6.2B aQuantive write down from 2012.
As of now, it’s unclear how exactly Microsoft plans to leverage Xandr, but the company has released a statement laying out some broad applications of the acquisition that include accelerating its current digital advertising platform as well boosting its retail media capabilities.
“With Xandr’s talent and technology, Microsoft can accelerate the delivery of its digital advertising and retail media solutions, shaping tomorrow’s digital ad marketplace into one that respects consumer privacy preferences, understands publishers’ relationships with consumers and helps advertisers meet their goals,” said Mikhail Parakhin, President of Web Experiences at Microsoft.
Microsoft has once again put itself under the gun of managing an acquire advertising platform, however, Microsoft CEO Satya Nadella appears poised to extract much better value out of Xandr than former CEO Steve Ballmer did out of aQuantive.