Yahoo announced today that it will acquire the 80% of advertising network RightMedia that it doesn’t already own for $680 million in cash and Yahoo stock. (Yahoo already owned 20 percent of the company, putting the total valuation at $850 million).
Yahoo previously bought 20% of the company in a $45 million Series B round of funding announced in October 2006. The company has raised over $50 million to date.
This move counters Google’s acquisition of DoubleClick earlier this month for $3.1 billion, and signals that Yahoo wants more weapons in its arsenal to fight the ongoing online advertising war beyond their new Panama release.
RightMedia runs an advertising marketplace that allows for much more efficient advertsing pricing than older negotiated models (something still in the planning stages at DoubleClick). See our coverage of their RMX Direct product from August 2005.
RightMedia also tends to work with large intermediate ad brokers and addresses the short tail of the ad market (as does DoubleClick), whereas Overture and Adsense are definitely long tail products with many smaller advertisers and publishers.