Yahoo! Buys BlueLithium To Strengthen Ad Presence, A Mistake

Yahoo! (YHOO) has entered into a definitive agreement to acquire BlueLithium, one of the largest and fastest growing online global ad networks that offers an array of direct response products and capabilities for advertisers and publishers. Under the terms of the agreement, Yahoo! will acquire BlueLithium for approximately $300 million in cash. 

BlueLithium provides media buying expertise that is complementary to the Yahoo! Publisher Network, enabling Yahoo! to further extend the reach and frequency of the quality audience advertisers have come to expect.

BlueLithium describes its businesses this way. "Unlike behavioral-targeting-only networks, BlueLithium leverages all major targeting capabilities to produce optimal results. Depending on your specifications and the needs of the campaign, the BlueLithium optimization team will layer: We target each of our 145M unique users based on their demonstrated interests, then serve the right ad regardless of what site they are on across our network."

It would appear that YHOO is getting more deeply into the display advertising market through network targeting which does not appear to be helping revenue at the portal or rivals AOL and MSN. With so much of the online dollar moving off to search results and social networks, it is surprising that Yahoo! would double down on such a tough business.

Douglas A. McIntyre