Microsoft is reportedly getting out of the ad business, cutting up to 1,200 jobs

Satya NadellaBusiness Insider/Julie BortMicrosoft CEO Satya Nadella

Microsoft is shutting down its display advertising business and handing over parts of it to AOL and AppNexus, Bloomberg’s Dina Bass reports. Up to 1,200 people could be laid off or transferred as part of the change.

Microsoft has been making a slow exit from the online advertising market for several years, and that shift has accelerated as CEO Satya Nadella is focusing the company on core businesses such as cloud computing and productivity.

In 2012, Microsoft took a $US6.2 billion write down for aQuantive, a company it acquired in 2007 in an attempt to take on Google and other companies in online advertising. In 2013, it sold part of the remnants of that business, the Atlas ad platform, to Facebook.

In fall 2014, Business Insider reported, Microsoft laid off much of its global ad sales team, which was responsible for selling advertising on MSN and other related sites.

Earlier this year, an internal power struggle at the company pitted the Windows group against MSN and other consumer online businesses — both groups wanted to use the default home page in Internet Explorer to promote their own products. Nadella essentially chose Windows and moved MSN under Windows leader Terry Myerson.

We have also heard some chatter that Microsoft under Nadella was considering getting rid of the MSN business entirely, but Microsoft has denied that speculation.

Nonetheless, if Bloomberg’s report is correct, Microsoft appears to be making another big cutback to its once massive advertising ambitions.

We’ve reached out to Microsoft for comment and will update this article if we hear back.

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