Portals Extend Reach via Ad Networks

In late 2004, Yahoo! CEO Terry Semel, speaking at the Association of National Advertisers, used a familiar metaphor for the company's strategy: a digital theme park that tempts visitors with endless attractions to get them to stay inside the gates. Analysts credited the strategy for reviving the company's fortunes following the dot-com bust. Fast-forward three years. Yahoo!, badly trailing rival Google and in the midst of a corporate reorganization following Semel's exit, is breaking with that vision. Instead of relying solely on the many features designed to keep people around to view the ubiquitous ads, Yahoo!, and other first-generation Web portals, are taking a page from Google's playbook to remake their businesses to focus not just on attracting eyeballs (and ad dollars) but to find them across thousands of sites and other digital destinations. Yahoo! illustrated its embrace of a network strategy by inking a deal last week to buy ad network BlueLithium for $300 million in cash. The deal came less than two months after it closed another deal to buy ad network and exchange Right Media for $650 million. More ...