Yahoo on Tuesday said it agreed to acquire ad network BlueLithium for about $300 million in cash, a move that will help the Internet giant sell advertising across a greater number of web sites.
The acquisition was expected to help boost Yahoo’s effort to develop a third-party advertising network, helping the Internet company better compete with rivals such as Google and Microsoft.
San Jose, California-based BlueLithium is the fifth-largest U.S. ad network, reaching 66 percent of Internet users, according to comScore. Founded in January 2004 and backed by Walden Venture Capital and 3i, BlueLithium’s bread and butter is aggregating and reselling banner ad inventory to marketers.
The BlueLithium is also known for its behavioral targeting, which has become the must-have for online marketers. Behavioral targeting allows marketers to target users based on the sites they’ve visited, as well as demographic and geographic characteristics. Yahoo recently launched SmartAds, a nascent effort in this area.
The acquisition also gives Yahoo a leg up in performance-based marketing, which allows advertisers to pay only when a user takes a certain action, such as clicking an ad, filling out a form, or buying something.
Up until now, Yahoo’s banner advertising efforts—as on the Yahoo portal homepage, for example—have focused on brand advertising from large companies that pay based on the number of views by users. The acquisition could give Yahoo access to a new market, since performance-based advertising tends to be done more by small- to mid-sized companies.
The agreement to buy BlueLithium follows Yahoo’s $680 acquisition of Right Media, which runs the most well-known advertising exchange. Right Media helps match buyers and sellers of remnant or non-premium banner advertising in an automated auction format.
BlueLithium will operate as a wholly owned subsidiary of Yahoo.