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Microsoft, Yahoo, AOL to sell one another's ads

A new partnership among the three online players will see them selling one another's online advertising in an attempt to compete with Google and grab more ad dollars together than separately.

Microsoft, Yahoo, and AOL are teaming up to sell one another's online ads.

Hoping to grab more of the ad dollars now spent at Google and on online advertising networks, the three companies will start selling ad inventory on one another's sites, according to AllThingsD's Peter Kafka. Specifically, the three will sell one another's "Class 2 display" ad inventory, or graphic ads that they either can't sell on their own or typically turn over to ad networks to handle.

Presenting their plan at a dinner briefing in New York City last night, the companies said they will share the revenue on any ads sold and figure they'll take in more money collectively than if they turned over the ads to a third-party network, Kafka noted. The partnership could also allow any one of the three to fill a big order for ads not just from its own inventory but from the inventory of the other two.

None of the three is restricted from working with ad networks, ad companies, or even with Google to sell ads. But one of the ultimate goals is to compete with Google, which currently owns the leading share of display ad revenue in the U.S., according to IDC. Though still in second place, Yahoo, in particular, has seen its display ad revenue drop and is looking for a way to reverse the slide.

The new team-up is expected to get off the ground by the end of the year.