Right Media, the ad exchange that was acquired by Yahoo in 2007 for a reported $680 million in cash and stock, has recently seen its founder Michael Walrath walk away from his job as Yahoo’s SVP of Advertising Strategy.
When the announcement of Walrath’s departure was made, Yahoo at the same time declared that it would be shifting strategy for Right Media by placing more emphasis on serving as a high-quality, premium marketplace rather than contuining to be an exchange platform for large volumes of ad networks, including many small ones (zing!).
They’re now making good on that promise by confirming that Right Media’s DMX (Direct Media Exchange) platform will be shut down on January 31, 2010.
From the FAQ:
Why are you discontinuing the DMX platform?
Right Media and Yahoo! have made a strategic decision to focus our business on becoming a premium and differentiated exchange marketplace. As such, the executive team made the difficult decision to discontinue supporting DMX.
How does this affect me?
On January 31, 2010, the DMX platform will no longer serve ads. You will be able to access your reports until March 1, 2010.
Will I continue to be paid until January 31, 2010?
While we do not comment on the particulars of contractual relationships with third parties, we have asked participating networks to satisfy all payment obligations through January 31. Please check your agreements to determine your partners. payment obligations.
Probably the right move for Yahoo to make, but pretty brutal for the lot of small ad networks that built their business on top of Right Media’s solutions.
(Hat tip to Marc Hodgins)
DMX was their self-service tail solution.
Obviously this move was once again by Carol “loser” Bartz of Yahoo.. It isn’t surprising that Mr. Walrath left them just this year plus 4 other institutes…
See the reasons Y? Yahoo is slipping to Armageddon: http://bit.ly/bit.ly/carol-bartz-is-a-loser
This is a very drastic move. DMX has a very bad reputation at the moment and sites are finally learning that it is better to fill low end inventory promoting their in house products, because they can then charge a little more for premium advertising.
Sites need to have a lot of fresh traffic in which they can sell premium advertising, but too much traffic means CPM rates drop fast!
Curious about market implications for companies like AdBrite, which is attempting a more agnostic and exchange-like platform.
AdBrite is the worst traffic you can buy.
the truth about rightmedia is that the purchase was so outrageous that even the the ceo of the (then private) firm spewed amazement at the terms in the nytimes. he apparently was astounded to discover what countless others already had: yahoo just can’t wait to fork over large sums of cash and get virtually nothing in return…the company has the worst M&A trackrecord not only just in the online space, but maybe in all corporate history
the translation of this article is simple: yahoo blew nearly $700 million and has nothing to show for it. part deux of this travesty is blue lithium, another tale of yahoo’s astoundingly clueless M&A team making someone else rich for no reason whatsoever
I just think that Yahoo is shooting itself in the foot.
They lost the Search war to google….
Now they just make Google the 100 pound gorillas of Ad Exchanges…
Yahoo Goes Premium…
Google is Premium with DoubleClick Clients but also support the long tail with its exchange…
The whole problem with RMX is that, networks are able to push ads on websites without any quality control from Yahoo. SO basically, Yahoo has no control over the quality of the inventory which is being sold in the marketplace.
A majority of networks accept all kinds of poor quality websites and serve ads on them from the exchange. Now this results in a bad advertiser experience.
This is quite a shocker. I recall the purchase of Rightmedia quite vividly. It was a lot of money and I certainly didn’t expect it to crash just a couple of years afterwards.
Ad exchanges were (still are) touted to be all the rage. They’ve powered a lot of ad networks but sadly it seems that the wheels are slowly coming off the wagon.
What does this mean for the other players into the ad exchange industry e.g OpenX Market, Adbrite etc. Are ad exchanges condemned to being the ad industry’s flea market?
@Steven, I agree with the idea of promoting premium in-house services with low-end inventory rather than scraping on a few cents on the dollar and inadvertently cannibalizing premium ad sales.
I sincerely hope the trend toward self serve advertising continues since we have a solution for those who wish to go that route.
AOL Time Warner has a much worse M&A history than Y! Bebo, AdTech, AOL, Buy.at. Even their own company (CNN) ranked the merger as The Worst of The Deceade. You know it’s bad when your own company insults it’s self in a news article.
Yahoo has been very successful with its small acquisitions. flickr, delicious, upcoming, xoopit they are all good; not home runners maybe – due to execution mistakes, for example flickr could take place of youtube if executed well – but still good. and they screwed with big ones; this, zimbra, maven, geocities, broadcast and so on…
These guys fired all of their AMs last year, leaving a pissed off, under-trained support crone. When I had a problem escalated to the “director” I was met with an egotistical dilettante that clearly knows nothing about ad optimization and obviously couldn’t work the mute button on his speaker phone. (Support guy openly admitted that he got the job from his brother and didn’t finish high school.) I left after that, and can promise that I was one of their top customers.
Pretty sad, because a couple of years ago, when it launched, this product actually had decent support staff that could spell and speak in complete sentences. Another example of politics, bureaucracy and nepotism destroying a company with actual potential.
Publishers affected by this should switch to a simple solution like zedo. Just take your ad tags from all your existing relationships and load them into zedo — and you are off to the races.