Santa came early for AT&T this year with the announcement that Microsoft will buy Xandr Inc., a global programmatic advertising marketplace, from the telecom giant. The deal does not include AT&T’s DirecTV ad sales business. Additional details of the deal were not disclosed, and the acquisition is subject to customary closing conditions and regulatory approval. Microsoft’s Mikhail Parakhin officially announced the agreement on its advertising blog.
AT&T’s spinoff is Xandr is related to the telecom company’s sale of WarnerMedia to Discovery, Inc. in a $43 billion deal which is expected to close in the middle of 2022. GeekWire reports that this deal will help Microsoft better compete with Google and Facebook in the online programmatic advertising space.
“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, in a December 21, 2021 news release.
Benefits for advertisers and publishers
Xandr will help Microsoft accelerate digital advertising solutions for the open web by combining the two companies’ assets and expertise, including Xandr’s large-scale, data-driven platforms for advertising. Microsoft said the benefits to the acquisition include the following:
· Improved activation and advertising results using Xandr’s cross-screen, first-party data-centered buying platform, Xandr Invest
· Better monetization for publishers using larger first-party data access and a full funnel marketing offering with Xandr Monetize, including Xandr’s video solution which empowers content and media owners to maximize the value of their inventory
· Increased advertiser and publisher value with Microsoft’s global native ad buying solution, the Microsoft Audience Network. This will help improve ad performance and provide access to global supply.
· Enhanced retail media solutions using PromoteIQ for reaching audiences across the open web and improving the economic engine for retailers while allowing them retain ownership of their data and customer relationships
· Accelerated Microsoft Customer Experience Platform capabilities by enabling marketers to reach high-value prospects across the open web which will enhance their ability to deliver reach and ROI through connected experiences
“We greatly admire the work Xandr has done and look forward to our collective opportunity to make Microsoft the media partner of choice for the open web,” Parakhin said.
Xandr also commented on the deal.
“Microsoft’s shared vision of empowering a free and open web and championing an open industry alternative via a global advertising marketplace makes it a great fit for Xandr. We look forward to using our innovative platform to help accelerate Microsoft’s digital advertising and retail media capabilities,” said Mike Welch, executive vice president and general manager for Xandr.
EU approves Nuance acquisition
In other Microsoft acquisition news, the European Commission gave unconditional approval for Microsoft to acquire Nuance Communications, a transcription software company with a strong focus on the healthcare sector and customer engagement solutions, for $19.7 billion in cash. This acquisition is Microsoft’s second largest in company history. With a $26.2 billion price tag, LinkedIn was Microsoft’s largest acquisition to date.
“Based on its market investigation, the Commission found that the transaction, as notified, would not significantly reduce competition in the transcription software, cloud services, enterprise communication services, customer relationship management, productivity software and PC operating systems markets,” said the European Commission in a December 21 announcement.
Microsoft received approval from U.S. regulators in June 2021. According to a filing with the Securities and Exchange Commission, Microsoft hopes to close this acquisition by the end of Microsoft’s second quarter or early in the third quarter of fiscal year 2022.
Tech giants like Google, Amazon, Apple and Microsoft are highly competitive, and those that can afford to acquire other companies to gain market share are doing exactly that. This deal will help Microsoft be more competitive in the programmatic advertising space. While it is unlikely that Microsoft will improve their online advertising market share over Google any time soon, this is a step in the right direction – acquiring expertise and tools needed to provide advertisers with more options.