Microsoft normally competes with AOL and Yahoo on a number of ventures, but today the three companies decided to team up in order to provide businesses with a better web advertising experience. The three companies announced today that this new display ad agreement will allow them all "the opportunity to access each other's nonreserved inventory to achieve the benefits of scale and efficiency."
While each of the three companies' web advertising groups (Yahoo! Network Plus, AOL’s Advertising.com and the Microsoft Media Network) will continued to be run independently of each other, this new collaboration will offer advertisers, in the words of Yahoo's vice-president Ross Levinsohn, " ... a more efficient, effective and more effortless way to access true premium inventory and formats."
This agreement is almost certainly a response by Microsoft, AOL and Yahoo to combat the dominance of Google which controls the lion's share of display advertising on the Internet here in the US. If an advertiser sees that a large ad campaign can be stretched out over three advertising companies and web sites networks, they might decide to go with that option than just using Google's solution.
At the moment, this collaboration is only available for advertisers here in the US. Yahoo and AOL have a similar agreement for Canadian businesses but Microsoft has chosen not to participate in that section of the world.