Sunnyvale, California — As part of Sunnyvale-based Yahoo’s strategy to recast the Right Media, the ad exchange that Yahoo acquired in 2007 for a reported $680 million in cash and stock, but on Tuesday the company announced that it will shut down the Direct Media Exchange (DMX) advertising platform, since its founder Michael Walrath recently quited from his job as Yahoo’s SVP of Advertising Strategy.
Yahoo is changing its ad marketplace strategy to a premium model from the DMX model that included large numbers of smaller ad marketplaces. But now the Direct Market Exchange (DMX) will stop delivering ads January 31, 2010, although users will be able to access reports until March 1.
“Right Media and Yahoo! have made a strategic decision to concentrate our business on becoming a premium and differentiated exchange marketplace. As such, the executive team made the difficult decision to discontinue supporting DMX,” stated Yahoo in a FAQ about the move on the Right Media site.
It also mentioned that ad networks taking part in DMX, including Adtegrity, Bannerconnect, and CPX Interactive, and .Fox Networks, would be asked to settle all payment obligations through January 31.
The move follows the announcement of Walrath’s departure, Yahoo took immediate steps last month to reposition Right Media as an exchange focused on premium, targeted inventory rather than being known as a trading hub for scores of anonymous ad networks.
Under the leadership of Carol Bartz, Yahoo has wrapped up a lot of products and services in recent months so that it could better focus on more important stuff. Briefcase, Farechase, GeoCities, and Go are some of the fallen that quickly come to mind.
This development follows the same logic. According to what has been labeled as “DMX End of Life FAQ,” “We are doing this because of market trends that have helped to inform our evolved strategy of becoming a premium supply and demand platform focused on being transparent, differentiated and interoperable.”
DMX was one of the emerging advertising exchanges, where display or graphical ads are bought and sold. Many marketers, however, would not participate because of the insight that these types of exchanges only traffic in low-quality ads.
Probably the perfect move for Yahoo to make, but pretty brutal for the lot of small ad networks that built their business on top of Right Media’s solutions. The biggest question remaining might just be what is next on Yahoo’s list of decisions to rethink.
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