What? You Thought Yahoo Was Going to Use a Google-Owned Ad-Serving System?
At the next all-hands. Just as a reminder. I’m sorry I didn’t do it today. I’m gonna put up there all of the press reports on how Yahoo was going out of business five years ago. And of how we were gonna be swallowed up by AOL, owned by Time Warner, and by Microsoft, and by everybody else. And Yahoo looked like it had a dim future. Well those headlines, of course, were used to wrap a lot of fish in a lot of people’s houses, as the expression goes. And they were all full of s—, and they had no idea what we had planned for them. And they do not now as well! So, we could read about how I’m gonna join some retirement home. And we could read about how the company doesn’t have a vision. And we could read about how we can’t do this and we can’t do that. Trust me, they will be as full of s— this time as they were last time.”
Semel was right about one thing, anyway: Yahoo does have a vision. Google’s. To recap, first Yahoo made Gmail-like improvements to its email service, then it launched its version of the Google blog. Yahoo takes on Google Desktop Search and AdSense followed. And now, weeks after Google spent $3.1 billion to purchase Internet advertising company DoubleClick, Yahoo has countered with an advertising acquisition of its own (see “Hello, Office Depot? Mr. Ballmer Needs a New Chair … Yes, Again.” and “Takes a Convicted Monopolist to Know One? Ha, Ha, Ha. You Google Guys Are a Real Laugh Riot“). This morning the company said it has agreed to acquire the rest of online ad exchange Right Media. Yahoo, which bought a 20% stake in Right Media last October, will pay $680 million, in equal parts of stock and cash, for the remaining interest in the company.
Now, $680 million might sound exorbitant, but Yahoo needed to parry Google’s advance into the graphical online advertising market. And not just to protect its turf. Yahoo is a DoubleClick customer, and the search juggernaut’s acquisition of the company could turn Yahoo into a Google client. By purchasing Right Media, Yahoo gives itself a DoubleClick exit strategy and some talking points with which to disparage it. “We think supply and demand should be regulated by the marketplace, not a closed platform,” Yahoo CEO Terry Semel wrote in a post to his Web log . “We think our open approach is a clear differentiator from others in the industry and will provide significant benefits to publishers and advertisers.”