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Yahoo to acquire online advertiser Right Media
Yahoo to acquire online advertiser Right Media
Tuesday May 01, 2007
Yahoo said Monday it is buying online advertising exchange Right Media in a move to counter Google's move to acquire the DoubleClick Internet ad-targeting firm.
California-based online search titan Yahoo, which owns 20 percent of Right Media, said it will acquire the remaining 80 percent of the company for 680 million dollars (500 million euros) in stock and cash.
"The acquisition of Right Media will further Yahoo's goal to create the industry's most open, accessible and vibrant advertising marketplace," Yahoo chairman and chief executive Terry Semel said in a statement on the deal to buy the firm matching online advertisers with websites.
Right Media is a leader in the growing online advertising market. More than 20,000 buyers and sellers use Right Media for their transactions every day.
"We are very excited by the prospect of becoming part of Yahoo, the market leader in display advertising, as it looks to revolutionize the media buying and selling landscape," said Right Media founder and chief executive Michael Walrath in a statement.
Yahoo bought its 20-percent stake in Right Media in October 2006.
Right Media's business operations will be independently run from the firm's offices in New York City, according to Yahoo senior vice president of marketplaces Todd Teresi.
Yahoo will use its computer servers, engineering talent and other massive technical resources to help Right Media quickly grow as a sophisticated open exchange for the buying and selling of online advertising.
While announcing on April 13, 2007 that it is buying New York-based DoubleClick for 3.1 billion dollars, Google revealed plans for the Internet ad tracking and targeting firm to create an open exchange akin to Right Media.
Yahoo hopes to entrench Right Media as the dominant ad exchange before DoubleClick can get its footing in the market.
"We think Right Media's lead in the marketplace puts us in a position of really being in the forefront from an execution standpoint," Teresi told AFP.
"When you develop and create scale very quickly, barriers to entry are created. We think we can get that scale very quickly and create those barriers to entry."
Six billion deals for online ads take place on Right Media daily, according to Yahoo. The four-year-old firm is on track to break even financially for the first time this year, said Yahoo chief financial officer Sue Decker.
Teresi maintained that the Right Media purchase is part of a strategy Yahoo initiated last year with an exclusive deal to handle display advertising at online auction website eBay.
Yahoo went on to buy part of Right Media in 2006 and build a consortium of newspapers to more effectively entwine online and print advertising opportunities.
"We are revealing bits and pieces of the strategy," Teresi said.
"That is why we see it as Google chasing us rather than Yahoo taking on the Google monster."
The ad exchange serves as a place where advertisers can easily "hook-up" with websites or online services that cater to desired customer demographics.
"We believe the power of many trumps the power of one and that open trumps closed," Semel said during a conference call with analysts and news reporters.
"By making an open exchange we create a better system that any one company can do on their own."
AFP
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