Yahoo, Microsoft, AOL form ad alliance

Yahoo, Microsoft and AOL have inked a display advertising agreement that will allow each company to sell their partners' "premium nonreserved" online ad space, and help curb the growing dominance from rivals Google and Facebook in the online advertising arena.

The partnership will "dramatically improve the process of buying and selling premium online display inventory", the companies said in a joint statement Tuesday.

Set to come into effect in 2012, the deal will offer the efficiency of buying premium display inventory at scale to reach customers and audiences, as well as enhance the demand for and value of each party's display advertising offerings as well as provide better yield for both participating publishers and advertisers, the statement noted.

The announcement of the alliance comes as the lion's share of display advertising has increasingly been eaten up by their rivals--Google and Facebook. According to an eMarketer study in June, Facebook is expected to overtake Yahoo as the No. 1 provider of display advertising in the United States this year, while Google is estimated to be second-fastest growing ad-seller.

The partnership will help Yahoo, in particular, address its shrinking ad revenue market share amid continuing speculation of the company's future.

Ross Levinsohn, executive vice president of Americas at Yahoo, said in the statement: "We're thrilled to partner with Microsoft and AOL and bring to market what we believe will be a more efficient, effective and more effortless way to access true premium inventory and formats.

"There has a been a significant shift in how inventory is bought and sold, and we're now 100 percent focused on controlling our own destiny, working directly with marketers and agencies and driving better returns for our advertising partners."