Remnant Inventory Pact Makes Yahoo!, AOL and Microsoft Strange Bedfellows

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ADOTAS – “Misery acquaints a man with strange bedfellows,” comments jester Trinculo as he partners with man-beast Caliban and drunk butler Stefano in Shakespeare’s “The Tempest.” And certainly Yahoo!, AOL and Microsoft are witnessing miserable times in the display game as Google and Facebook take the lion’s share of the market — so why not hop in bed together, at least in terms of remnant inventory?

Casting a digital “Tempest,” I’d pick Yahoo as the drunk (the company’s actions sometimes suggest it’s not sober), Microsoft as the monster (do you remember the 90s?) and AOL as the jester (almost every new initiative seems like a joke).

The Internet portals three — Microsoft, AOL and Yahoo! — have agreed to a pact in which they sell the remnant display inventory for each others’ content networks, the kind of stuff that typically gets tossed off to the networks and exchanges for audience targeting.

So say Yahoo! is structuring a campaign aimed at sports fans and it wants to spice up its reach, it can sell some of Microsoft and Yahoo!’s sports-related inventory, with the revenue split between the parties. That revenue will definitely be higher than if the inventory went onto RTB-enabled exchanges.

Peter Kafka at All Things D notes that the plan sounds similar to the plan of supply-side platform 5to1, which aimed to build “an online advertising alliance consisting exclusively of major media publishers.” Lo and behold, who acquired 5to1 but Yahoo!, whose EVP of Americas Ross Levinsohn played a role in founding and funding the startup.

Since we heard whispers that 5to1’s technology was more theoretical than existent, we thought the acquisition was allowing Levinsohn to reassemble his old Fox Interactive Media team, but it seems bigger plans were afoot. This also makes us raise our bet on Levinsohn taking over as CEO for the departed Carol Bartz.

But I’m curious: do you guys think this is a fortuitous business arrangement or last-ditch effort to fight off an invading force — namely Google?

4 COMMENTS

  1. Agree on Levinsohn…that seemed like the obvious reason for the 5to1 acquisition. Trading remnant between these networks is old news and has happened for years informally. Is this a content cartel or something more informal? I think what would be really interesting would be if these guys tightened their data policies and pulled their inventory from the Doubleclick exchange. That would be an interesting move for Armstrong, an ex Googler.

  2. Btw, I think Armstrong is Prospero here — AOL has had a bad news cycle because of Techcrunch, but if he consolidates YHOO’s inventory he is a big winner. “Sweet are the uses of adversity, which like the toad, ugly and venomous, wears yet a precious jewel in its head.”

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