Yahoo has announced it is purchasing Right Media (a company in which it already owns 20% of) in an effort to compete against Google’s purchase of Doubleclick earlier this month.
Right Media is a marketplace where publishers and advertisers negotiate prices and lends itself to a more transparent form of business than Google’s AdSense does. This could give Yahoo the upperhand, as publishers seek the ability to earn more money by playing a more active role in the selling of advertising space on their websites.
Right Media was launched in 2003 and purchased for $680 million.
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2 Responses
Respiro, the logo design guy
May 1st, 2007 at 1:44 am
1We all know that Yahoo’s Right Media purchasing is an answer for Google’s acquisition. Google invested $3.1 billion in DoubleClick and Yahoo $680 million in Right Media - let’s see in time if this difference will have any relevance.
I would like to know if Google and Yahoo has any plan to reach the small and medium-sized businesses? In my opinion, the one of them which will have an attractive offer for this segment will have a BIG + [plus].
Michael Wales
May 1st, 2007 at 6:57 am
2Google and Yahoo have dabbled in the purchases of small companies - Jotspot (Google), del.icio.us (Yahoo), and flickr (Yahoo) were all small shops in terms of manning.
Unfortunately, as Redeye VC stated in his article “The M&A Lotto” - you have a more likely chance of winning the $5 million in the New York Lotto than being acquired by either Google or Yahoo.
Google has only acquired 32 companies since 2001, Yahoo only 49 since 1997. This is an average of a little more than 5 companies per year for Google and slightly less than 5 per year for Yahoo. These are high numbers but these are also hot properties - in which Google/Yahoo have enough money to buy them out.
I think the real market for acquisitions come from the smaller new media companies (eBay, Amazon, GoDaddy, etc) and the old media as it attempts to reform and become relevant once more (News Corp, Viacom, etc). These companies are in more of a position to acquire a company with a fair amount of risk, or a company this isn’t simply mind-blowing, and then invest a vast amount of resources into turning it into something amazing.
Google and Yahoo are in the practice of taking a great service and monetizing it for their benefit (or killing it, for the Dodgeball guys). The smaller companies and old media are in the business of acquiring and making the product better, while profiting from it, in the case of MySpace, for instance.
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