Yahoo is now $650 million poorer, but that is all right – it is only a side effect of the Right Media acquisition having been completed!
San Francisco — Yahoo Inc. took control of online advertising exchange Right Media Inc. on Thursday, giving the slumping Internet portal a head start on rivals Google Inc. and Microsoft Corp. in a heated race to build more powerful marketing vehicles.
Yahoo joins WPP and Microsoft in the regulatory green light club, as all three have cleared the standard Hart-Scott-Rodino antitrust waiting period for their acquisitions–meaning that the FTC did not feel the need to further investigate or block their intended acquisitions in the interest of market competition.
“We are pleased to have closed our Right Media acquisition so quickly and are excited to welcome Right Media’s talented employees to the Yahoo! family,” stated Jerry Yang, Yahoo’s new CEO, in a press release.
In any case, Yang continued, “We believe Right Media will be a perfect complement to our industry leading advertising tools and capabilities and help Yahoo! continue to transform how advertisers and publishers connect to their target audiences.”
The Sunnyvale-based company is counting on its nearly $700 million acquisition of Right Media to help sell more Internet ads that rely on graphics and other visuals — a format expected to become increasingly popular as companies promote brands online instead of television, magazines and newspapers.
Google has relied largely on short, text-based messages to establish the Internet’s largest ad network so far. But while Yahoo can focus on leveraging Right Media’s technology and client base to spark its’ lagging display ad business, Google’s DoubleClick deal remains under antitrust scrutiny.
According to an FTC source, the aforementioned deals were not deemed anti-competitive, and as such, “are done as far as regulatory review is concerned,” although shareholder approval is still pending for Microsoft’s purchase of aQuantive.
While FTC officials are not permitted to comment on investigations in progress, sources say the agency is grappling with the myriad of issues surrounding the transaction–including input from outside sources like the 4A’s and the ANA and from consumer privacy groups like EPIC, as well as the information Google was asked to provide.
The delay could help both Microsoft and Yahoo as they try to close the gap with the world’s biggest search engine, said Tim Vanderhook, chief executive of online ad service Specific Media.
“I think they are very excited about Google and DoubleClick deal being tied up because it gives them more time to try to catch up,” Vanderhook said.
In anticipation of greater demand for more dynamic ads, Google and Microsoft are buying services that help distribute graphical advertising on the Web.
This would not be an entirely new situation for either company — Yahoo acquired a 20 percent stake in Right Media last October for a reported $40 million. The New York-based company runs a system that allows Web publishers to auction advertising space to the highest bidder. Right Media typically collects a 7 percent commission.
Two weeks after Google agreed to buy DoubleClick in April, Yahoo announced it was buying the rest of Right Media for $680 million. By the time the cash-and-stock deal closed, the final price for the remaining 80 percent stake in Right Media had fallen to $650 million because of Yahoo’s skidding stock.