AT&T (T) is divesting and moving on with Xandr, its tech-driven advertising subsidiary. The US telecommunications giant recently announced on Tuesday that it’ll be selling Xandr to Microsoft (MSFT) for a reported $1b price tag.
Xandr was set-up in 2018 and focuses on automated TV advertising services for clients. Recently, though, because of AT&T selling off its media units, Xandr’s utility in the company is overplayed. The divestment to Microsoft makes sense because the software company sources significant revenues from advertising on LinkedIn, MSN, Bing, and also runs its own ads for Windows and Office. Xandr’s dual-functionality as a sell-side and buy-side ad service looks good on Microsoft.
Why it matters
Microsoft shares were up by 0.5% yesterday, while AT&T was up by 0.4% — makes sense as the divestment is part of AT&T’s broader strategy to streamline and reduce debt that has investors worried. The company is currently in talks to merge its WarnerMedia segment with Discovery (DISCA).
