AT&T has been exploring alternatives for some of its assets to focus on its wireless business.
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AT&T Inc. T 2.25% will sell its online advertising platform Xandr Inc. to Microsoft Corp. MSFT 0.70% , ending its bid to become a major force in digital marketing.
Microsoft said Xandr’s digital ad marketplace will help boost its digital advertising and retail media capabilities. Financial terms weren’t disclosed. Last year, The Wall Street Journal reported that AT&T was considering a potential sale of its digital advertising operations, as it scaled back its media ambitions.
AT&T acquired the advertising technology company formerly known as AppNexus in 2018 for about $1.6 billion with an aim to challenge heavyweights such as Google parent Alphabet Inc. and Meta Platforms Inc.’s Facebook in the digital ad market.
Xandr’s online ad exchange allows advertisers to buy space across thousands of websites and target audiences. AT&T executives hoped to appeal to marketers by combining the unit with TV ad space on channels such as TNT and CNN as well as its data about wireless subscribers.
The unit failed to yield the explosive revenue growth its owners hoped to generate and often struggled with technical problems familiar to tech companies that invest billions of dollars a year in their ad exchange technology.
The media and telecom conglomerate has been exploring alternatives for some of its assets to focus on its wireless business and bolster its balance sheet. AT&T agreed to sell a stake in its DirecTV business to private-equity firm TPG and struck a deal to merge its WarnerMedia business with Discovery Inc.
Microsoft’s search advertising business had revenue of $8.5 billion in the year ending June 30, 2021, making up about 5% of the tech giant’s revenue. The company makes money by selling ads on various services, including its Bing search engine, business-focused social-media platform LinkedIn and in its videogaming platform.
Write to Kimberly Chin at [email protected]
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