Report: AOL, Microsoft and Yahoo To Team For Display Ads

In an apparent response to Google’s rising prominence in the display advertising market, the rest of the major players — Yahoo, Microsoft and AOL — are reportedly teaming up to sell ads on one another’s sites. The report in the Wall Street Journal’s All Things D says the pact was explained to a group of ad buyers and Web publishers at a dinner last night in Manhattan.

The agreement is also aimed at reducing the amount of inventory that’s going to ad networks, where pricing is lower than the companies think they can charge themselves. Yahoo, Microsoft and AOL are also hoping to get other large Web publishers to join the consortium.

According to All Things D, the idea is that the publishers will contribute their “Class 2 display” inventory — ads they weren’t able to sell themselves and would normally fill with ad network inventory.

The challenge for all of the parties will be to train and encourage their sales team to sell inventory on what are, essentially, competitor’s sites. The report says each of the publishers will be responsible for encouraging their sales forces to sell the consortium’s inventory.

The partnership isn’t exclusive and allows any of the Web publishers to work with other ad networks, including Google, according to the story. According to an IDC report, Google overtook Yahoo in terms of display ad revenue share in the first quarter of 2011 for the first time.