American telecommunications giant AT&T is selling Xandr, its advertising and analytics division, to Microsoft for an estimated $1 billion. For AT&T, the sale has long been in the works, as the digital advertising marketplace has underperformed and failed to become a major revenue source for the company. Microsoft, on the other hand, is optimistic that it can leverage its technological advantages and global reach alongside Xandr’s high-scale, data-driven advertising platforms to impact the digital ad marketplace. The sale is the latest in a series of high-profile spinoffs from AT&T, preceded by the WarnerMedia merger with Discovery and the creation of a new, standalone DirectTV.
Microsoft’s relationship with Xandr predates the latter’s 2018 acquisition by AT&T. The Seattle-based big tech leader was an initial investor in AppNexus, the company and platform that was formed into Xandr by AT&T. Microsoft hopes that with Xandr’s talent and technology it can enhance its own digital advertising and retail media solutions, transforming the digital ad landscape into one that carefully considers consumer privacy while helping advertisers meet their goals. The purchase comes amid a push by Google and other major digital advertising organizations to deprecate or eliminate the use of third-party cookies, creating the need for novel and innovative advertising solutions.