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Microsoft, AOL, Yahoo, Form Ad Alliance Against Google

Recently Barnes & Noble said that part of Microsoft's tactics to raise rivals’ costs included the participation in a group of companies to purchase Novell patents. Microsoft also reportedly participated in a three-way licensing agreement with Nokia and Mosaid Technologies. According to the book retailer, these two specific actions supposedly intend to "prevent Android- based devices from taking away sales of Microsoft’s Windows operating system."

Now there are reports that Microsoft is seemingly confronting Google on another front: the advertising market. According to Reuters, Microsoft has formed an alliance with Yahoo and American Online that allows each partner to sell each other's unsold premium advertising inventory, or rather display ads, by next year. This would essentially leave Google out of the picture, a lucrative service for the search engine company that extends out into the Android platform.

Yet despite the alliance, the three companies will still remain competitive with each other for both advertiser spending and publishing partners. They will also maintain their own set of controls. "We're not reducing competition in any way, shape or form," said Rik van der Kooi, corporate vice president of the Microsoft Advertising Business Group, claimed during a news call. "As a result of transparency, the competition is only going to increase. (We) don't expect any issues on that side."

Van der Kooi added that other players in the industry are welcome to join the alliance, that it's not a response to anyone in particular. He described the three-way partnership as a "rising tide that lifts all boats."

"The partnership will in effect allow the three web giants to sell online adverts across their respective sites, in hope to compete with Google and social network Facebook, which is set to increase its share of advertising dollars for three years in a row," explains Zack Whittaker over on ZDNet.

Both Google and Facebook are currently leading the market in online advertising, totaling over 1.6 billion users worldwide. However the duo is expected to increase their share of U.S. based online display advertising from 9.3 and 16.3 respectively. Ironically, both companies are rivals in the social networking market.

Yet now Microsoft has teamed up with Yahoo and AOL... and it has nothing to do with the rival Android developer? "The fact that we’re joining together to offer this kind of access to quality -- yet each with our own differentiated ad offerings -- is something that will benefit the market as a whole," van der Kooi said.