AOL and Microsoft compete for advertisers’ dollars. But they’ve figured out a way to cooperate, too: The two rivals have struck a deal which lets Microsoft distribute AOL’s videos on some of its properties.

The deal will give Microsoft access to all of the videos in AOL’s inventory — both the stuff Tim Armstrong’s company has made, like clips from HuffPost Live and TechCrunch, and the stuff it distributes for other video makers, like ESPN and TMZ.

For now, Microsoft plans on running the clips on its MSN portal, as well as its Bing apps that run on Windows and Windows Phone. Microsoft will sell most of the ads for the videos, and the two companies will share ad revenue.

AOL, which has made a big push into video for the last few years, has done other distribution deals, including one on YouTube.

But AOL officials think this one, given Microsoft’s appetite for “premium” content, could be its most significant. Microsoft says MSN alone reaches an audience of 450 million people.

Scott Ferris, who oversees Microsoft’s TV and video ad business, says his company is still committed to producing its own videos, some of which it will show off to ad buyers on Monday.

That presentation, which is part of the “NewFronts” ad extravaganza, “will speak volumes that we’re in the business for the long term,” he said.




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