Yahoo to acquire Web ad network

Times Staff Writer

Yahoo Inc. said Tuesday that it planned to buy online advertising network BlueLithium Inc. for $300 million in cash, the latest move to strengthen its ability to deliver targeted, relevant campaigns for online advertisers.

BlueLithium, a privately held 3-year-old San Jose company with 120 employees, was the fifth-largest ad network in July, showing ads to 145 million unique visitors on various sites across the Web, according to research firm ComScore Networks. Its technology allows advertisers to target so-called display ads by tracking consumers’ online behavior and Web surfing history.

Yahoo Chief Executive Jerry Yang is trying to reinvigorate the Sunnyvale, Calif.-based company amid a slowdown in parts of its advertising business. The acquisition, expected to close in the fourth quarter, also marked the latest in a string of major Internet companies snapping up smaller ad networks.


“I anticipate this continuing,” said Mike Vorhaus, managing director at consulting firm Frank N. Magid Associates.

Todd Teresi, senior vice president of Yahoo Publisher Network, said the deal was the next step in Yahoo’s strategy to transform how advertisers connect with publishers. An earlier step was buying Right Media Exchange this year for $680 million, Teresi said.

“Yahoo has been very strong on the branding side of the business, but has struggled in recent months on the direct marketing side,” Teresi said. “This absolutely is right in line with our strategy to get that business back on track and accelerate our growth.”

BlueLithium targets consumers by, among other methods, showing them the same ads on several different websites.

Shares of Yahoo rose $1.24, or 5.5%, to $23.97, propelled by a bullish research report from Bear Stearns that named the company an acquisition target. Its shares gained an additional 15 cents in after-hours trading.