Yahoo today announced that it has entered into a definitive agreement to acquire the rest of Right Media, for $680 million, a deal which highlights how Internet companies are betting big on new approaches to extend their online advertising reach.

Yahoo took a 20 percent stake last October in privately held, New York-based Right Media, which was founded in 2003.

“The acquisition of Right Media will further Yahoo’s goal to create the industry’s most open, accessible and vibrant advertising marketplace, which will help democratize the buying and selling of digitally enabled advertising,” said Terry Semel, chairman and CEO of Yahoo. “This acquisition is an important step in our long-term vision to build the industry’s leading advertising and publisher ecosystem. We believe that Yahoo’s open approach is a clear differentiator from others in the industry and provides significant benefits to advertisers, publishers and Yahoo itself.”

“We share Yahoo’s vision of a more empowered marketplace, where efficiency, transparency and accountability in online advertising become the norm,” said Michael Walrath, CEO and founder of Right Media. “We are very excited by the prospect of becoming part of Yahoo, the market leader in display advertising, as it looks to revolutionize the media buying and selling landscape.”

Right Media runs the Right Media Exchange in which advertisers and publishers buy and sell online ad placements in real time through an auction system.

Shareholders of Right Media will be paid in roughly equal parts in cash and stock, and employee stock options and other equity awards will be assumed by Yahoo, Yahoo said.

Right Media’s open exchange “will facilitate a frictionless model where buyers have equal opportunity to engage with the largest, most valuable audiences and to extract the maximum value from their campaigns and [where] sellers can access an enormous pool of advertisers and foster competition for their inventory to maximize revenue,” the company said.

Rivals and other companies can sell their ad inventory through Right Media’s exchange, which operates on an auction model, Yahoo added. Exchanges can provide a more liquid market, which can potentially increase the demand and prices paid for such inventory. Right Media earns a commission on any transaction conducted through its exchange.

This development follows the announcement made last month with arch rival Google plans to acquire DoubleClick, a move which has generated strong opposition from many companies including Microsoft and AT&T.

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Entry was posted on Sunday, April 29th, 2007 at 11:52 pm under Technology.

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