London -- Yahoo Inc., which until now did not have an advertising deal with any of the big social networks, announced on Wednesday an exclusive partnership with Bebo to manage display advertising on the social networking Web site in Britain and Ireland, giving it access to more than 11 million sought-after users.
Yahoo! says the three-tier agreement marks Yahoo!’s first tie-up with a social networking site and will enable the internet firm to provide its advertisers with “substantially improved” marketing opportunities in the traditionally hard-to-reach 13- 24-year-old age group.
As part of the deal, Yahoo!’s knowledge service “Yahoo! Answers” will also be integrated into Bebo's website. In addition, a new Bebo toolbar has been developed by the two firms so that Bebo users can monitor their social network even when they are not on the website.
The deal will see Yahoo selling the majority of display and video advertising to an estimated audience of 11.6 million members in the two countries and 38 million users worldwide. Joanna Shields, president of Bebo International, told Reuters she would be keen to expand the agreement globally.
The deal marks further momentum in Yahoo’s campaign to add other major Web sites to its ad network instead of the rival networks of Google Inc and Microsoft Corp.
The partnership is an extension of a deal signed in May which saw Yahoo! begin providing search on Bebo. Yahoo! Europe managing director Toby Coppel says: “This is the next step of our ongoing strategy to build the largest and most effective online advertising network.”
“We think this is a groundbreaking move in the online advertising industry in the UK and Ireland,” said Coppel. “It is a core step for us in building up the largest and most effective advertising network. It is a big deal.”
“Yahoo was previously rumored to be in talks to acquire Bebo for $1 billion in May.”
The two groups said advertisers would benefit from the combination of Bebo’s highly engaged audience with Yahoo’s insight and ability to target consumers.
Social networking sites such as Bebo, Facebook and MySpace are hugely popular with younger Web users -- an important yet hard-to-reach category for advertisers -- but media groups have struggled to convert their soaring popularity into revenue.
Bebo say its average user ranges from 13 to 24 years old and spends 40 minutes on the site each day they log on.
The advertising deal with Yahoo! will enable Bebo’s sales team to concentrate on developing sponsorship opportunities and further develop its entertainment opportunities such as the online drama “Kate Modern” and the new interactive drama “Sofia’s Diary.”
The deal is likely to be seen as a good win for Yahoo, the market leader in display advertising, which is making a major push to expand the percentage of advertising that occurs off the Yahoo network of properties.
Shields said they had chosen Yahoo because it could target consumers with appropriate adverts.
“In an environment like Bebo where our users are our core constituency, we had to be sure that the ad partner that we selected could deliver a targeted ad that was going to complement the experience of the social network,” she said.
Yahoo has made two acquisitions this year -- Right Media and the yet-to-close BlueLithium deal -- to bolster the Internet media company’s ability to deliver ads to non-Yahoo sites.
A year ago it struck a deal to handle advertising for eBay Inc in its core U.S. market; Yahoo supplies a broad consortium of U.S. newspaper publishers with online ads; and along with Comcast Corp., it supplies ads on the Web sites of the largest U.S. cable television network operator.
This at least gets them in the game. Yahoo! and Bebo will begin to roll out the joint initiatives before the end of the year.
Last year Google snatched up Myspace advertising with a nearly $1 billion deal. Facebook went with Microsoft, and then Friendster announced a multi year deal with Google earlier this year.
“Financial terms were not disclosed and the length of the agreement was described as multi-year.”