Microsoft buys Xandr, AT&T’s advanced advertising business

Microsoft has acquired Xandr, AT&T’s advanced advertising platform, in an effort to ramp up its digital advertising and retail media business.

Financial terms for the deal, which still needs to pass regulatory review, were not disclosed. AT&T noted that the sale does not include its advertising sales business that supports DirecTV.

AT&T reportedly paid $1.6 billion in 2018 for AppNexus, the ad tech firm it acquired to be a key component of Xandr.

“Microsoft’s shared vision of empowering a free and open web and championing an open industry alternative via a global advertising marketplace makes it a great fit for Xandr. We look forward to using our innovative platform to help accelerate Microsoft’s digital advertising and retail media capabilities,” said Mike Welch, executive vice president and general manager at Xandr, in a statement.

“With Xandr’s talent and technology, 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, in a statement.

RELATED: AT&T may also look to sell off Xandr advertising unit: report

For AT&T, this is the third major divestiture in 2021. The company spun off its linear TV businesses (DirecTV, U-verse and AT&T) and received $7.1 billion in cash and transferred approximately $195 million of video business debt. The company is also in the process of spinning off WarnerMedia (home to Turner, HBO and Warner Bros.) and combining it with Discovery, Inc.

AT&T also sold Crunchyroll, an anime streaming service, to Sony for $1.175 billion earlier this year.

For Microsoft, the Xandr acquisition provides a large-scale, data-based advertising platform to combine with its audience analytics, technology and global advertising customer base. The company said it expects the deal to provide improved activation and advertising results through Xandr’s cross-screen, first-party data buying platform, Xandr Invest; more first-party data access and a full marketing offering through Xandr Monetize; improved ad performance access to global supply for the Microsoft Audience network; enhanced retail media solutions with PromoteIQ; and improved Microsoft Customer Experience Platform capabilities that give marketers better reach and ROI on connected experiences.