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Yahoo has announced that it plans to acquire the online ad network BlueLithium for $300 million. This is an important and expected move by Yahoo to keep pace with Google, Microsoft and AOL who have also been aggressively buying advertising technology and networks.
BlueLithium is ranked as the fifth largest online advertising company in the US. It’s network grew based on the strength of its performance based display ads, meaning that advertisers only pay when people respond to a banner ad by taking some action like participating in a promotion or agreeing to receive more information about a product. BlueLithium is also a leader in behavioral targeting technology.
The combination of the two technologies could dramatically “improve” how Yahoo targets display ads to it’s Yahoo! Mail customers. There has been similar talk of Myspace and Facebook using their customers personal information to improve the targeting of their advertising. Privacy concerns are still an issue, but it looks like behavioral targeting will soon be common practice industry wide.
An interesting side note, is that this purchase might indicate a renewed interest by Yahoo in improving the effectiveness of banner ads through better targeting. Banner ads have always been a staple in online advertising, but they have lost their sexiness over the last couple years. By acquiring Blue Lithium, Yahoo may be on its way to bringing sexy back…
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