In July, display advertising was a noted weak spot when Yahoo reported 2nd quarter earnings. In an effort to provide an immediate boost, Yahoo today acquired internet advertiser Blue Lithium for $300m in cash.
Blue Lithium, which was founded in 2004 and was preparing for an IPO, is something of a blind-buy network. They sell a publishers advertising inventory but do not disclose to advertisers precisely what sites the ads will run on. Instead, they serve them “blind” based on various demographic and targeting criteria. Many of the Blue Lithium publisher relationships are also not exclusive.
In July Blue Lithium ranked as the 5th largest online ad network according to ComScore. Close to 50% of their inventory reportedly comes from top 250 websites. Representative clients range from Best Buy, Mattel, AOL, at&t, Delta Airlines, Blockbuster, Mercedes and others.
The buy is the first major move for Yahoo advertising business since management changes in June when David Karnstedt was promoted from search advertising to head all U.S. ad sales at Yahoo. It’s clearly aimed to bring an immediate boost to Yahoo’s ad portfolio but it also directly targets rival Google.
"With our goal of creating the largest global ad network, this really moves us along the continuum," said Todd Teresi, senior vice president of the Yahoo Publisher Network.
CEO Jerry Yang, added, “This acquisition will extend our ability to deliver powerful data analytics, advanced targeting and innovative media buying strategies to our customers, who are increasingly looking for these insights. By leveraging Blue Lithium’s complementary expertise and tools, we will be able to better address the needs of our performance-based display advertisers and enhance the value of our publishers’ inventory.”
The deal will close by late 2007. Blue Lithium will be integrated with the rest of Yahoo’s advertising business, including the Right Media Exchange (acquired in late April). Blue Lithium will also be used to compliment the Yahoo Publisher Network. The acquisition should improve Yahoo’s ability to sell advertising outside its own network.