Microsoft has announced that it will transfer its display ad inventory across several platforms such as MSN, Outlook.com and Skype to AOL as it looks to slim down its loss-making online business.

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About 1,200 jobs will be impacted by the move, but the company has said that it will be offering these employees a chance to move to AOL and that it isn’t making any layoffs.

It is estimated that Microsoft’s online operations such as Bing and its MSN web portal have lost $10 billion over the past 5 years. CEO Satya Nadella has said that Bing will turn a profit in the next fiscal.

Microsoft is focusing its attention on Bing search in order to cash in on search advertising, however, since the appointment of Satya Nadella as CEO, he’s been streamlining the workforce and getting rid of non-core businesses.

Currently the deal is that AOL will sell display ads on MSN, Outlook.com, Xbox, Skype and in some apps in major countries for 10-years. The sweetener here is that Bing will power search on AOL properties from early next year.

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