Microsoft Targets Google's AdSense with OpenX Deal

Posted 11 5 2009 8:35AM

Microsoft just added yet another layer of weapons in its battle against Google and others for search advertising. The Redmond, Wash.-based software giant inked a deal with OpenX Technologies that will directly compete with Google's AdSense business. Pasadena, Calif.-based OpenX is an independent ad server for web publishers.

OpenX will be the preferred partner for Microsoft's enterprise ad-serving business and will also promote Microsoft's Content Ads -- a program that matches ads to specific editorial content, giving advertisers increased effectiveness -- and future products to its web publishers.

"Microsoft believes that rapid innovation and openness is foundational to great advertising technology," said Scott Howe, corporate vice president of Microsoft's Advertiser & Publisher Solutions, the company's ad technology and monetization platform. "We are pleased to partner with a company that supports this vision. OpenX is a leading technology provider of valuable options and solutions to the publisher community and, by extension, the digital advertising ecosystem as a whole.

Win, Win

As part of the agreement, OpenX will promote Microsoft's Content Ads in two ways. First, OpenX will integrate Content Ads so the program can be used by publishers who sign up for OpenX Market.

The OpenX Market is a marketplace where publishers can directly connect to advertisers to sell their inventory of advertisements, and advertisers can access targeted inventory. The market runs a real-time auction for each advertisement impression.

The company will also build a plug-in to OpenX Ad Server so existing publishers can easily sign up for Content Ads and implement the program on their web sites. This is the first time Microsoft has approved a reseller to build a plug-in for Content Ads.

Through its multi-year agreement with OpenX, Microsoft will be able to distribute its money-making products through OpenX's more than 150,000 web sites that serve more than 300 billion advertisements per month, according to Microsoft. In turn, OpenX will be able to reach a new group of customers through referrals from Microsoft.

Behind the Scenes

The deal comes after a year-long trial during which OpenX enabled its publishers to test the product.

Behind the deal was OpenX's executive team made of up former Yahoo and AOL executives, including former AOL CEO Jonathan Miller, who is now chairman of OpenX, and Yahoo's former senior vice president of global advertising marketplaces, Tim Cadogan, who is now CEO of OpenX.

"What we are doing is pretty important; we give anyone the option to run sophisticated advertising for their web site," Cadogan said. "One thing that is unique is we are based on an open-source foundation, and hopefully this will have something for everyone."

"Obviously we are thrilled and the fact that Microsoft will reach out to a company like ours is an important signal of Microsoft's openness to openness," he added. "I think it will be very interesting to see what they do going forward."