Yahoo Inc announced on Tuesday its new revival strategy of buying an online advertising technology firm Interclick Inc for $270 million in cash.
New York-based Interclick deals is purchasing bulk advertising space from big players and selling it to the clients. Its shareholders are offered a premium of 22 percent of the stocks.
Interclick was founded in 2006 and offers tools to help advertisers identify their online target audience. Its annual revenue is of about $102 million and offers a great innovative segment analytics platform to analyse real-time user data for targeted advertising.
Digital-ad sellers were buying ad space on Yahoo websites and selling it for much higher prices. Industry experts consider this as a profitable acquisition where Yahoo will have a bigger platform to understand its ad space worth.
Michael Katz, Interclick?s founder and chief executive, appreciated Yahoo for the quality of the inventory it has been delivering for years. He firmly believes in the new revolution that would be imminent in the market with the combination of Yahoo?s premium data and Interclick?s tremendous values it creates for the clients.
Colin Gillis,?BGC partners analyst, remarked: ?Yahoo does not have much of a leverage right now. They’ve got no CEO and everyone knows they are up for sale. So how much pricing power does that give them?? He added this acquisition would help them regain the lost market share.
Sunnyvale, California-based Yahoo, which has struggled for its revival in the last few years, expects using Interclick?s offerings for its own display advertising business. Interclick will bring along its data targeting, optimisation technology and more inventories for sale.
Competition from Google leads Yahoo laying efforts to prop up partnerships with Microsoft and AOL. Interclick would be of extra advantage to Yahoo, as it is experienced in selling audience across different platforms.
Sources: BRecorder, Economic Times, Times of India, Wall Street Journal