Yahoo has acquired the advertising network Blue Lithium for $300 million. According to alarm:clock Blue Lithium had revenues of 100+ million in 2006.
The acquisition increases Yahoo's role as a seller of advertising on non-Yahoo web sites. While traditional ad sales representation is not a terrible attractive business compared to being an integrated publisher with internal ad sales team, it makes sense as Yahoo seems to taking steps in creating a more effective market for non-premium advertising inventory. When creating a market you want lots of buyers and sellers and as most of the activity online does not take place on Yahoo's web sites, it makes sense to get deeper into the business of selling ads for other companies as that brings more sellers to the market.
The second part of the problem is to bring buyers of advertising to the market. Google managed to do that in search marketing by making each search an economic unit that can be valued and bought. The big opportunity in non-premium banner advertising for Yahoo (and others) is figuring out a way to describe each individual banner impression in a way that enables advertisers to bid on each impression like they do on search words. Personally I think that behavioral targeting will play a significant role in how an ad impression is described, and thus the Blue Lithium acquisition gets interesting.
For Internet users the upside is that if the problem of the generic ad impression is solved, we will likely see far more relevant adverts when surfing the web. And that is a good thing.
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