Kara Swisher

Recent Posts by Kara Swisher

Day 50: Yahoo Takes a $300 Million Little Blue Pill That Could Make Consumers Even More Paranoid

Yahoo is watching you!

Now, as it turns out, more than ever after it forked over $300 million yesterday for an ad network that specializes in the hyper-trendy data analytics arena.

bluelithium

The savvy purchase marks the 50th day of Yahoo CEO Jerry Yang’s 100-day trek to finding nirvana for the troubled Web company. This day, it seems, by spending a pile of cash for an innovative ad network called BlueLithium.

It is clearly a score for its investors Walden Venture Capital and 3i. (And interestingly, its board includes Interactive Advertising Bureau co-founder Rich LeFurgy, now at Archer Advisors, and also former Time Warner and CompuServe exec Scott Kauffman).

Why Yahoo could not have created this kind of thing itself is a query for another day, but there is no question it will give it a nice push in its quest to service a range of other Web sites beyond Yahoo with a more sophisticated ad network.

The venture-backed BlueLithium, which has been around since early 2004, basically buys display ad banners from other Web sites and resells them to bigger advertisers using behavioral targeting as its silver bullet.

You know the drill: If I am searching on Rome, I must be interested in going there and, presto, I get an ad for plane flights or hotels or tours…blah, blah, blah.

Another pitch of outfits like BlueLithium, of course, is that consumers are happier because they get just the right ads served up to them.

“By combining behavioral, contextual and demographic click stream data with advanced analytics and sophisticated ad targeting, we’re able to deliver ads that people are actually interested in,” notes its Web site. “This leads to higher response rates and sales for marketers and more revenue for publishers. But it also leads to higher quality ads and less clutter for Internet users, which is just as important.”

Oh, yes, thanks for the favor!

In fact, such ad cyber-stalking–even when done with strict privacy rules–is surely getting creepier than ever, but is obviously inevitable.

And necessary, it seems for Yahoo, which saw a big falloff in its own graphical ad business on its sites recently and needs more variety to broker to ever-pickier advertisers. It follows its acquisition of the remaining part of Right Media, another online ad exchange.

Why the company is called BlueLithium is not entirely clear to me, although lithium salts are excellent mood stabilizers, which can work on both mania and depression.

Perfect for Yahoo these days!

Please see this disclosure related to me and Google.


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— David Pogue on why he’s joining Yahoo