Day 50: Yahoo Takes a $300 Million Little Blue Pill That Could Make Consumers Even More Paranoid
by Kara Swisher
Posted on September 5, 2007 at 2:29 AM PT
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.
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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Comments
Kara, Interesting points. But, here on your page I see ads of SAS and SONOS alongwith some other ads served by Google right now. The ads that I see are for google analytics, wall street online, spyware remover (this looks really shady) and cookie removal tool. Last two seem very shady and I won’t take a chance clicking on them. I don’t know what SAS is and I could care less about SONOS. So basically, from an advertisers point of view it was a waste of page served (a lost opportunity). Plus it was a bad experience from a user point of view. But, if the ads were relevant to what I was doing for last 30 mins it would have enhanced my experience on the page and perhaps generated a little more revenue for publisher and value for advertiser. That would have been a win-win. And, with current consolidation in ad market I don’t think any of the ad networks are not going to do this. The fact is Yahoo is leading the charge because it has more tools available at its disposal. And, once doubleclick deal goes thru; google too will jump in with all the resources. Is this creepy? not entirely, they have all our emails and its contents and everything we do at their servers is recorded and we have no problems with that. So, what is wrong if they serve relevant ads based on all the information they already have about me? At the end of the day; behavioral ads are inevitable and I won’t mind it until they leak data (just like AOL or some other way).
Posted by Nirav Bhavsar at September 7th, 2007 at 11:17 pmOk, I agree. Serve up ads to me!
Posted by Kara Swisher at September 14th, 2007 at 2:02 am