Yahoo Inc. agreed to acquire closely held online-advertising company BlueLithium for about $300 million as the Internet giant tries to expand its ad reach beyond its own sites.
BlueLithium, founded in January 2004, operates what is known as an online-advertising network. It buys graphical-display ad slots, such as banners, on about 1,000 sites owned by other Web publishers and resells the slots to advertisers.
The purchase -- which follows a wave of online-ad acquisitions by Yahoo and rivals Google Inc. and Microsoft Corp. -- is part of the Internet company's push to increase the number of places where advertising it sells appears. Yahoo is hoping such ad sales outside its own sites will help boost its ad-revenue growth as advertisers look beyond the big portal sites. It cited disappointing revenue from display ads in announcing a 2.3% drop in second-quarter profit in July.
"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, which handles relations with partner sites that carry ads brokered by Yahoo.
BlueLithium, of San Jose, Calif., which has 120 employees and declines to disclose its revenue, had previously planned to hold an initial public offering early next year. The company uses so-called behavioral-targeting technology, which allows advertisers to have their ads displayed to groups of consumers based on their online activities, such as individuals whose Web surfing suggests they are researching a car purchase.
Yahoo said data collected for such behavioral targeting will span its own sites and those on BlueLithium's network. It played down consumer-privacy concerns, saying the data collected would be used to display advertising more relevant to users in a way that respected their trust in Yahoo. The company said users will be allowed to opt out of the sharing of such behavioral data across Yahoo and BlueLithium's ad network.
Yahoo said BlueLithium will also bring additional tools for so-called performance-based advertisers, whose spending Yahoo says it hasn't sufficiently tapped. Such advertisers often allocate their ad dollars based largely on what given ads yield in terms of sales rather than looking for a more general improvement in perception of their brands.
Yahoo in April had paid $680 million for the remaining 80% of online-advertising exchange Right Media Inc., following a 20% stake it bought in October, as part of the strategy of expanding its advertising reach to other sites.
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