Yahoo Buys Right Media In Answer To Google's DoubleClick Acquisition

In a reponse to Google's recently announced plan to acquire Internet advertising company DoubleClick, Yahoo today said it would buy Right Media, which operates an online advertising exchange.

Last October, Yahoo bought 20% of Right Media. It will pay about $680 million in cash and stock for the remainder. The acquisition will extend Yahoo's ability to broker ad deals beyond its own Web properties.

Right Media currently coordinates the trading of more than 4 billion ad impressions daily among 20,000 ad buyers and sellers.

"We hope to revolutionize the way ads are bought and sold on the Internet and, in turn, drive more value for advertisers, publishers, and partners," Yahoo CEO Terry Semel said in a blog post.

"We think supply and demand should be regulated by the marketplace, not a closed platform," Semel said. "Right Media provides a democratic model that empowers advertisers with all of these benefits. We think our open approach is a clear differentiator from others in the industry and will provide significant benefits to publishers and advertisers."

Yahoo has been working to improve its online ad sales revenue, mainly though the introduction of its Panama search marketing platform earlier this year. It also has been pursuing partnerships with companies like eBay and a consortium of more than 260 newspapers.

While its most recent quarter disappointed Wall Street, Yahoo maintains its improved search advertising technology will lead to more revenue in the second quarter and beyond.

Internet metrics firm comScore offered preliminary verification of this, noting in February that "Yahoo's new search marketing ranking model is already having a positive impact on the click-through rates for Yahoo's search advertising," as James Lamberti, comScore's senior VP of media and search solutions, put it.

Postings on the Webmaster World forums, however, show that some marketers using Yahoo's search marketing platform aren't thrilled with their results. The issue among those opting to complain online appears to be that while Yahoo ads pay more per click, Google ads generate significantly more clicks, meaning they're more relevant to Web site visitors. This makes Google's lower paying ads more profitable to Web site publishers.

Yahoo's ability to compete with Google in coming months will depend largely on its ability to increase the relevancy of its ads. Access to Right Media's inventory of ads and content may prove helpful in that regard.