By Adam E. John

The companies will simultaneously compete and cooperate in the advertising market. Yahoo, Microsoft, and AOL has signed agreements on buying and selling premium online display inventory by which they can offer each other’s premium nonreserved online display inventory to their respective advertising customers. This partnership will also offer the efficiency of buying premium display inventory at scale to reach customers and audiences

By integrating one another’s real-time bidding (RTB) technologies to facilitate the availability of nonreserved inventory by early 2012, Yahoo, Microsoft and AOL expect to have the opportunity to access each other’s nonreserved inventory to achieve the benefits of scale and efficiency.

The Microsoft Advertising Exchange and Yahoo’s Right Media Exchange will initially serve as the two marketplaces from which the partners can procure this inventory for resale. AOL may, at its discretion, opt to use its own exchange technology solution subsequent to the launch of the partnership.

Under the terms of the nonexclusive agreements, each company will continue to make its own decisions, differentiate its offerings and set its own controls for how it operates any exchanges, ad networks or other aspects of its display businesses. They will actively compete with each other for both advertiser spend and publisher partners based on their own unique product differentiators.

Effective in the United States, the partnership is based on the premise of audience-based selling across a large number of sites and is not expected to affect direct sales made by each partner’s respective internal teams.  In addition to the United States, Yahoo and AOL will have an agreement that extends to Canada.  Microsoft’s Canada business is not participating directly in the agreement.

(Adam E. John is consulting editor with techtaffy.com. He can be reached at adam@techtaffy.com)