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Yahoo buys online ad firm 5to1

Yahoo and 5to1

Internet giant Yahoo has been working to focus on its core businesses, shedding things like AltaVista, Buzz, del.icio.us, and shifting its back-end search operations to Bing in an effort to tidy up its bottom line. Now, however, Yahoo seems to be back in an acquisition mood, announcing it will be taking over online advertising firm 5to1. Although financial terms of the deal weren’t disclosed, reports have the takeover valued at about $28 million—which is quite something, considering 5to1 has yet to earn any money, and lost $9 million last year on revenue of $1 million.

Yahoo’s interest in 5to1 seems to be its advertising platform: 5to1 handles online advertising placements for about 20 “premium publishers,” offering a publisher-controlled platform where publishers can fill unsold (or “remnant”) advertising inventory with premium ads with major media publishers. According to 5to1, its “double opt-in” platform only offers premium inventory and eliminates the need for block lists.

“5to1’s innovative platform and premium private marketplace will further enable Yahoo to extend our advertising leadership,” said Yahoo senior VP for advertising sales Wayne Powers, in a statement. “5to1 provides additional access to publishers and unlocks the value of unsold inventory for premium brand advertisers.”

Yahoo may be hoping to use 5ot1’s platform as a method to pump new vigor into its ad business: while overall online advertising sales jumped 15 percent in the last year, Yahoo only saw its ad revenue increase by 1 percent.

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