Yahoo! buys Right Media, a smart move to defend its online ad leadership

by Charlene Li

Yahoo! announced that it would buy the remaining 80% of Right Media that it doesn't already own for $650 million today. (, and GigaOm also have coverage).

I was briefed about this late Sunday evening by Todd Teresi, Sr. VP of Display Marketplaces at Yahoo!. Todd's title should give you a hint about why Yahoo! purchased Right Media. Right Media owns an ad exchange, which is different from an ad network. Ad networks typically aggregate ad inventory from publishers and resells it to advertisers. In contrast, an ad exchange is a marketplace where publishers and advertisers can find and execute advertising transactions, similar to what happens on a stock exchange. Ad networks could turn out to be one of the largest users of ad exchanges.

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Google Takes DoubleClick for $3.1 Billion

I'll admit.  I had my money on Microsoft taking DC as a technology solution to their ad serving need.  And I think if the deal were only about technology, Microsoft would have made a solid suitor.  But DoubleClick brings Google much more than an ad serving solution.  What's my take on this deal?

*Google wins.  We've been watching Yahoo! and MSN chase Google since paid search marketing exploded as a marketing channel and major revenue source for the three portals.  This deal ends the race.  With its DoubleClick purchase Google extends its capabilities into online display advertising and completes its set of online services.

*Its not about the technology.  Google already had ad serving.  This deal gives Google access to publishers outside of its current AdSense network and to behavioral data that will help them with ad targeting.

*Now Google can move offline.  I agree with Charlene Li on this one.  With the online space locked up, Google can focus on maturing its current offline efforts and on defining its next moves into traditional channels.

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