Microsoft buys Xandr, ending AT&T’s ad tech bet that never really paid off

By Ronan Shields

To say that it’s been widely understood that AT&T was looking to offload Xandr, the outcome of its 2018 AppNexus purchase, for some time would be an understatement, at the very least.

And with the news that Microsoft has bought Xandr for an undisclosed fee, this deal represents the close of another chapter of one of the most iconic names in ad tech. Microsoft’s purchase of Xandr is subject to customary closing conditions, including regulatory reviews, with Mike Welch, Xandr evp and GM, claiming his outfit’s technology can help accelerate Microsoft’s digital advertising and retail media capabilities.

Similarly, Mikhail Parakhin, president of web experiences at Microsoft, said in the same statement that he hopes to shape the digital advertising marketplace, “into one that respects consumer privacy preferences, understands publishers’ relationships with consumers and helps advertisers meet their goals.”

Several suitors were in the running

Microsoft was an early-stage investor in AppNexus and formed several key strategic partnerships with the outfit prior to its 2018 sale to AT&T, albeit, it faced some competition to purchase the ad tech assets from the telco in recent months with InMobi hotly tipped in the race.

Xandr offers, what is in effect, a modular ad tech stack with a host of tools that serve both the buy- and sell-side of the market with the company concentrating the bulk of its efforts on weaning publishers off Google’s lucrative ad stack under its AppNexus guise.

Several sources told Digiday, that during the protracted run-up to the most recent announcement, a number of suitors, including a rival sell-side ad tech player that was newly endowed with public funds following an initial public offering, kicked the tires of Xandr.

One source even told Digiday that there were internal discussions at Comcast about a potential approach for Xandr, but formal negotiations never materialized.

Xandr’s rollercoaster fortunes

The deal rounds off the latest flurry of mergers and acquisitions in the sector with notable end-of-year deals including Criteo’s purchase of IPONWEB for $380 million, plus GumGum buying Playground xyz, many of which were fueled by the spate ad tech companies going public over the last year such as Outbrain’s $55 million purchase of Video Intelligence.

In mid-2021, Axios reported that Xandr’s ongoing sale process was taking place as “losses mount.” One source with knowledge of its 2020 financials described them as “not pretty” to Digiday, a key reason why AT&T struggled to find a buyer in the early days of its sale exploration.

For some, the bifurcation of Xandr and AT&T’s premium media assets (a process that will take place as part of the creation of Discovery-WarnerMedia) makes it an undifferentiated asset with its “Community Garden” offering widely acknowledged as a disappointment.

Although, sources within Xandr are keen to highlight how its revenues have seen something of …read more

Source:: Digiday