Yahoo has announced it plans to buy the remainder of Right Media, Inc. for some $680 million, in a move calculated to extend the Internet giant’s advertising reach into social networking sites. Right Media is an advertising exchange handling banner ads and other online ad formats, and has had considerable success offering ads to lower-traffic sites and niches of larger services, rather than focusing on the same high-traffic turf covered by large-scale advertising networks. Yahoo bought a 20 percent stake in the Right Media during October 2006.
“The acquisition of Right Media will further Yahoo’s goal to create the industry’s most open, accessible, and vibrant advertising marketplace, which will help democratize the buying and selling of digitally enabled advertising,” said Terry Semel, Yahoo’s chairman and CEO, in a statement. “This acquisition is an important step in our long-term vision to build the industry’s leading advertising and publisher ecosystem. We believe that Yahoo’s open approach is a clear differentiator from others in the industry and provides significant benefits to advertisers, publishers and Yahoo itself.”
Yahoo will pay shareholders in roughly equal amounts of cash and stock; Yahoo will also take over employee stock options and other equity awards.
Yahoo plans to ramp up its presence in the Right Media exchange both as a buyer and a seller of advertising, ramping up the liquidity on the exchange while at the same time ramping up competition for ad space on the network—which, in turn, will tend to raise ad prices and earn more money for Yahoo. Of course, Yahoo is pitching the acquisition as a tremendous benefit to advertisers, who will gain the ability to target their campaigns at an even wider audience across both Yahoo and general Internet properties.