By : Admin

Yahoo agreed today to buy online ad network BlueLithium for $300 million in cash, in a move to fortify the company’s position versus Google and Microsoft in the competitive market for placing ads on the Internet. BlueLithium, of San Jose, Calif., snaps up banner and other graphical ads from Web publishers and resells the real estate slots to online advertisers. ComScore Media Metrix rates BlueLithium as the fifth largest ad network in the United States, with 145 million unique visitors each month.

The buy expands Yahoo’s network horizons, tacking on complementary behavioral technology and campaign and inventory management technology, as well as extending the value of data gleaned for ad targeting purposes.

The performance-based behavioral targeting network has about 135 employees scattered in 10 offices in Boston, Chicago, London, New York, Paris, and Belarus, and elsewhere. Besides operating a large ad network, BlueLithium provides tracking technology, known as “behavioral targeting,” that identifies Web surfers with particular interests so the ads they see will be more interesting to them.

The BlueLithium deal comes after several organizational changes at Yahoo, taking place during a few weak financial quarters. In July, Yahoo said its second-quarter profit dropped 2.3 percent to $160.6 million. The purchase of BlueLithium should boost Yahoo’s plan to branch out beyond its own well-known brand at a time when advertisers are looking beyond the large portals.

Although BlueLithium offers CPM-based pricing, Yahoo believes the acquisition will help it better provide performance-based display advertising sold on a cost-per-action basis. Indeed, the network buy could be a way to boost Yahoo’s recently weak display ad revenues. BlueLithium targets ads using behavioral, demographic and geographic information, as well as by day-part.

Yahoo will incorporate BlueLithium’s sales, operations and engineering operations into its ever-morphing corporate structure. BlueLithium CEO Gurbaksh Chahal will remain in his current position for an interim period through the integration.

The combination of Bluelithium’s assets and relationships with Yahoo!s overall ad network will give advertisers access to powerful data analytics, advance-targeting and innovative direct-response buying strategies across a broad range of high-quality inventory.

Blue Lithium is one of the larger ad networks behind giants like Advertising.com and ValueClick.

The deal is the latest in a string of similar deals by online ad portals. Earlier in 2007, Google bought DoubleClick for $3.1 billion, Yahoo snapped up the 80 percent of Right Media it didn’t already own for $680 million and Microsoft picked up aQuantive for $6 billion.

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