My How Things Change – Innovation or Desperation?

An AllThingsD blog report came out today about a partnership announced at a dinner the other night by AOL, Microsoft and Yahoo.  I guess it depends on which side of the dinner table you’re on to determine whether it is a genius form of innovation or a sad bit of desperation from companies struggling to maintain market share. Their plan is to group together to sell each other’s “Class 2 Display” inventory centrally and share the revenues.  By doing this, they can make more money as they don’t need to be served by ad networks and therefore pay the middle men.  In theory, it seems to be ho-hum at best – especially when they are supposedly allowing ad networks to continue selling the same inventory.

In human terms, it wasn’t long ago that all of these companies were at the absolute top of the world and in control.  In technology, that time was forever ago.  Google has certainly taken the throne from an ad perspective and everyone else is trying to catch up.  Bing didn’t work as well as Microsoft hoped. Yahoo is still trying to figure things out in the hopes of being somewhat relevant (small disclaimer that I still appreciate a bit of what Yahoo is offering if only because my personal email is a Yahoo account) and I wouldn’t even think of AOL in terms of being relevant after what happened to that Time Warner empire they owned.  Sure, these are still three large players in the scheme of things, but it is amazing how quickly fortunes can change.  I definitely heard grumblings of how those three were invincible in the same way I hear about Facebook and Google today.

It certainly seems like a desperate attempt to maintain revenue margins if not share of market.  I guess I would have been more impressed if they had used their powers to develop something truly innovative – not just a reshaping of something that already exists – to enable stronger targeting across their sites, easier planning interfaces across the three or some other media benefit. A bigger fear is that advertising on any of those becomes more challenging than it sometimes is on Hulu with multiple owner/players.  At this point, it leaves a bunch of media buyers asking “what’s in it for me?”  I hope the dinner was good…

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