AOL, Microsoft, and Yahoo! partner to fight Google

In the wake of the firing of its colourful CEO, Carol Bartz, Yahoo! has dominated headlines with stories of boardroom politics and rumours of acquisitions. The latest rumour, from the Wall Street Journal (WSJ), points to AOL, Yahoo!, and, Microsoft forming a partnership to battle Google‘s web dominance.

According to the Journal, ad executives who were pitched a new ad-buying system say that the three internet companies have devised a plan wherein they will sell advertising on each other’s sites. The plan is seen as a move by the three to recover market share lost to Google in the lucrative online advertising business.

According to “people familiar with the matter”, the Madison Avenue advertising executives would have been told that Yahoo!, AOL, and Microsoft’s new system would display ad space on their sites that hasn’t already been sold directly to marketers. The scheme would be launched early in 2012 or late 2011.

The deal could not come at a better time with projections from digital advertising analysts eMarketer pointing to Yahoo! and Microsoft continuing to lose market share in online advertising while Google continues to grow its share.

While the ad executives are reported to have been enthusiastic about the proposal, they also had their reservations, the WSJ reported.

Were the planned strategy to go through, it would also be closely watched by regulators on the lookout for “anticompetitive and privacy issues”.

Yahoo! and Microsoft issued statements regarding the WSJ report.

Yahoo! said, “At Yahoo!, we’re fortunate to have deep, longstanding relationships with brands, publishers and agencies, and are working on dynamic and innovative ways to put value where value is due,” adding that Yahoo! had “longstanding relationships with AOL and Microsoft and will continue to partner and compete in the years to come.”

Microsoft was just as cryptic saying it was, “always looking for ways to partner with others in the digital advertising ecosystem to offer innovative solutions that benefit advertisers and publishers.”

It remains to be seen whether or not these statements are an indication that the reports are true.