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• AT&T had been looking for a buyer for Xandr for over a year
• Both the companies did not disclose the financial terms of the deal
AT&T Inc on Tuesday said it has agreed to sell its advertising unit, Xandr, to Microsoft Corp, partly exiting from a venture that had become expensive for the telecom giant.
The deal, which is subject to regulatory review, will give Microsoft’s advertising customers access to Xandr’s marketplace for automated online advertising, the companies said in a statement.
Although both the companies did not disclose the financial terms of the deal, the divestiture was long-expected as the carrier earlier decided digital advertising wasn’t central to its operations.
“Microsoft can accelerate the delivery of its digital advertising and retail media solutions, shaping tomorrow’s digital ad marketplace into one that respects consumer privacy preferences, understands publishers’ relationships with consumers and helps advertisers meet their goals,” said Mikhail Parakhin, President of Web Experiences at Microsoft.
Shares of AT&T rose more than 2.5% in the early trading session in New York, while Microsoft jumped about 1.4%.
AT&T divestiture
Xandr, whose name was inspired by Alexander Graham Bell, was created in 2018 after AT&T acquired ad exchange AppNexus and merged it with AdWorks, a TV ad tech company that used data collected from phone, internet and TV services to target consumers. The telecom giant said at the time that it hoped it would become a multibillion-dollar business.
However, for more than a year, AT&T had been looking for a buyer for Xandr abandoning the dream to become a major player in online ads in the Google and Facebook dominated sector.
The sale is also a part of a broader portfolio reshuffling, as the telecom giant, which has a media company, satellite TV provider and an advertising platform all under one roof, faced criticism from the investors for struggling to reduce debt.
AT&T moved its DirecTV operations to a joint venture with TPG in August this year and announced to merge WarnerMedia unit with Discovery Inc, a $43 billion deal, which is expected to close by the middle of 2022.
The telecom giant said the deal to sell Xandr does not include the advertising sales business supporting DirecTV.
Picture Credit: Reuters