Microsoft Corp. is shutting down its Web display advertising business and handing operations over to AOL Inc. and AppNexus Inc., a person with knowledge of the matter said.

About 1,200 jobs at Microsoft will be impacted, with some positions to be moved to AOL and AppNexus, said the person, who asked not to be identified because the deal hasn’t yet been announced. Some people will be offered other positions at Microsoft, while other jobs will be cut, the person said.

The software maker is shedding the business as Chief Executive Officer Satya Nadella works to sharpen focus on three key areas: personal computing, cloud platforms and business productivity. Since becoming CEO early last year, Nadella has been streamlining the workforce, acquiring mobile and cloud software makers, and paring units not central to his strategy.

Financial terms of the deal weren’t immediately known.

Peter Wootton, a spokesman for Redmond, Washington-based Microsoft, declined to comment.

To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net Reed Stevenson