Sunnyvale, California — Just at the start of this week made headlines for its executive exodus, Yahoo seeking to maintain its hold and capitalize on the display advertising market, Tuesday disclosed on its corporate blog that it has acquired the San Francisco-based Dapper, a startup that focuses on fancy contextual display ads, i.e. ads that take what is happening on a content producer’s website as a cue for what to serve up to a viewer.
Recently, both Yahoo and Google have been engaged on optimizing contextual display ads for quite some time, and this recent acquisition comes after Google brought Teracent, a similar company last year.
This is Yahoo’s first acquisition since the trio of Koprol, Associated Content and Citizen Sports in May.
The startup specializes in dynamic ads and a bidding technology for display ads. Financial terms of the acquisition were not disclosed but the sell price is said to be in the $20 million to $30 million range.
“Yahoo! has endorsed a definitive agreement to acquire Dapper, a technology platform providing dynamic display ad creation and optimization,” Yahoo announced.
“Yahoo! is already the largest and most eminent force in display advertising, but the vital addition of Dapper will enable our advertisers and agencies to quickly and easily build dynamic ad creative, leveraging data to automatically show the right product, offer, or message with each impression,” the announcement continued.
Dapper has created technology to dynamically create and target personalized ads at Internet users. Looking to consolidate its foothold in ad market, Yahoo expects the acquisition will enable it to use Dapper’s technology on a variety of Yahoo sites and for retargeting customers with personalized ads served on Web pages they subsequently visit.
“Dapper’s capabilities combined with Yahoo!’s already deep consumer insights will further enhance Yahoo!’s ability to deliver customized and relevant advertising,” the Sunnyvale, California-based Yahoo! said in a statement.
Frank Weishaupt, a Yahoo! vice president, said the deal will eventually help Yahoo advertisers to develop more personal, relevant ads and make money from contextual ads placed on Websites as Dapper provides dynamic display ad creation and optimization platforms. Dapper’s “smart ads” products picks the lead of the content people are consuming on a publisher’s Website and “automatically shows the right product, offer and message”.
Yahoo! said it currently partners with Dapper and owning the company will enable Yahoo! to “deliver innovative solutions to an even broader range of advertisers and integrate dynamic ad serving into key Yahoo properties.”
“The Dapper team is thrilled to be joining Yahoo!, already the largest and most successful force in display advertising,” said James Beriker, Dapper President and CEO.
Dapper is a four-year-old startup which focuses on display ads, arguably one of Yahoo’s main interest. The company managed to create a few technologies which would make a good asset for Yahoo. Dapper’s technology allows users to easily set up their display ad preferences online, such as total amount to spend on a campaign, and put the most updated and accurate website information into display ads. For example, an e-commerce website selling electronics would be able to showcase its most recent sales items in its display ads in real-time.
“The inclusion of our technology platform will bring advertisers and agencies a highly scalable solution for building and optimizing dynamic ad campaigns with the reach and quality of Yahoo!’s network,” Dapper said in a statement.
Eran Shir, Dapper co-founder and CTO also published a rather thorough blog post detailing the sale and the reasons behind it.
“Dapper emerged about four years ago with, I would like to think, a bold mission statement: ‘To put the right content, at the right time, in front of the right user’,” Shir said.
When explaining why the company sold, he said that the money, though nice, was not the main reason. Rather, it has to do with scale.
“One important reason has to do with a word I like: Leverage… In display advertising, there is no player with bigger leverage than Yahoo. Being part of Yahoo, we can actually make a dent in what people consider an ad should be,” he explained.
Dapper, which was founded in 2006, has received $3 million in financing from Accel Partners among others, and it is worth noting that Former Yahoo’er Amit Kumar was formerly product manager at Dapper and currently sits on the Dapper board.
Yahoo! said it expects the acquisition to close in the fourth quarter of 2010.