Yahoo! has entered into a definitive agreement to acquire Right Media, the creator of the Right Media Exchange, to secure a leading position in the online advertising market.
For Yahoo!, the acquisition of Right Media represents a key step towards executing the company’s long-term strategy to transform how online advertisers connect to and engage with their customers – both on and off the Yahoo! network.
Under the terms of the agreement, which follows Yahoo!’s 20% strategic investment in Right Media in October 2006, Yahoo! will acquire the remaining equity interest in Right Media for approximately $680 million.
Shareholders will be paid in approximately equal parts cash and stock, and Right Media options and similar equity awards will be assumed by Yahoo!.
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.
An open exchange will provide tremendous opportunity for advertisers, publishers, advertising networks, and for Yahoo!, the company said. For example, advertisers will have greater inventory and audience options from Yahoo! and other exchange participants, as well as increased control and visibility into the buying process.
In addition, publishers will be able to bundle their own ad inventory with Yahoo!’s inventory and the exchange’s inventory – thereby boosting demand and generating the highest returns for each ad placement.
For Yahoo!, this more open approach will allow the company to increase liquidity, allow advertisers to more efficiently ascertain the true value of display ad inventory, and generate greater returns for Yahoo!’s own display inventory. It will give the company a new channel and inventory for excess demand and provide an opportunity to derive more value from non-premium inventory.