AT&T has agreed to sell its advertising business Xandr to Microsoft for an undisclosed sum. Microsoft already works with Xandr for many years using its ad monetisation tools, and the technology is expected to complement Microsoft's existing digital advertising operations. The company will continue to serve global advertisers after the takeover.
The sale comes amid increasing regulation and scrutiny of privacy practices in online advertising, changing the dynamics of the business and limiting synergies with telecom data sources. Microsoft said the deal will help "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".
The deal is the latest in a string of divestments by AT&T to refocus on its core telecom business and exit the media market. AT&T set up Xandr in 2018 following the acquisition of the adtech business AppNexus. The company was expected to help monetise data from its pay-TV business and build new income sources online. Following the acquisition of WarnerMedia, Xandr was integrated with the Warner advertising activities.
AT&T has since sold off its pay-TV business and is now planning to spin off WarnerMedia in a new joint venture with Discovery. The separation of the advertising business may help to reduce competition concerns over the joint venture.
Xandr generates around USD 300-380 million in annual revenues, sources familiar with the matter told Axios. The company is not profitable, generating around USD 50-90 million in losses per year, depending on the accounting method, the sources said.
