The Story Behind the Story: Why We Sold Atlas to Facebook

You may have heard today that Microsoft announced its intent to sell the Atlas Advertiser Suite to Facebook. 

Our reasons for wanting to sell Atlas are really pretty  simple: the time was right; the agreement allows us to focus more aggressively on the evolving vision we have our digital advertising business; it was mutually beneficial to both parties; and we feel that Facebook will afford the Atlas business and employees the greatest opportunity for continued growth.  Moreover, in no way does this announcement change or diminish our commitment to online advertising, in either display or search.

In terms of timing – why now?  Here’s my perspective.

The online advertising business, and our place in it, has evolved significantly since we acquired aQuantive (and by extension, Atlas) more than five years ago.    At the time of the acquisition, Microsoft was in a race to build a single ad technology platform and tools stack that would become a marketplace where first and third party online advertising entities could conduct their business, either in pieces or holistically.  

That vision of a singular ad technology and tools platform, however, became more challenging given significant changes in the industry ecosystem, technology platforms and content consumption (the “appification” of the web).

We needed to sharpen our focus and concentrate on identifying, building and executing on the things that are core to our vision for the future as our entire company transitions to a devices and services model.  The continued investment in third party ad serving technology like Atlas, while important, is less of a strategic pillar for our business than it once was.

Perhaps more important than anything, five-plus years ago we did not have the stable of mature owned & operated media/screen assets with global reach that we now have, including: Xbox/Kinect,  Skype, Bing,   Windows Phone, a new and improved MSN that delivers premium ad experiences, and last but certainly not least, Windows 8 applications.  

Our vision has evolved.  We want to stay laser focused on building devices and services that we believe will represent the advertising platforms of the future.

We believe that the future of digital advertising will manifest in the following ways:

•    Effective advertising will continue its inexorable march toward becoming a “pull” experience that people invite into their lives as opposed into a “push” experience where advertising is served to them indiscriminately across devices and screens.

•    Compelling advertising experiences will be centered around the user.  Relevance will be the Holy Grail; user experience will be king.

•    Data and insight will provide a 360-degree view of the consumer – capturing signals like social, location and intent.  This requires the ability and engineering horsepower to process these new signals as well as the ability to put the user in control of their data; it    also requires a foundation built on trust.

•    Relevance will be defined at a more granular level through both 1st party and 3rd party content and services.

We believe that digital advertising today is not fulfilling its promise. Consumers really don’t want ads per se -- they want digital content and experiences that enhance what they’re doing, whether that comes from brands, publishers or peers.  For us to deliver on these consumer needs and help marketers do the same, we need to be precise in how we’re investing our resources.  

This is the vision we are calibrating toward, and is the single biggest reason why we made the decision to sell Atlas to Facebook.  

We believe that we now have more clarity in what our vision for the future is, more incredible assets upon which to bring that vision to life, more focus to deliver on that vision, and more commitment than ever before to dedicate the resources necessary to back up our promises.

Thanks.

Tom Phillips