Yahoo! Spending $680 Million For Remaining Stake in Right Media
Right Media is a private, New York-based advertising company that offers products known as PMX (Publisher Media Exchange), NMX (Network Media Exchange), and AMX (Advertiser Media Exchange). The product-line that Right Media offers was so appealing that Yahoo! wanted ownership. This is why Yahoo! spent $45 million to buy 20% stake in the company back in October 2006.
Google announced on April 13, 2007 that the company would be acquiring DoubleClick Inc. for $3.1 billion. This announcement rippled concerns amongst various other media companies, Microsoft Corp., and Yahoo! Inc. regarding monopolistic practices. Yahoo! counter-acted this concern by fully acquiring Right Media for $680 million on top of its previous $45 million investment.
“By now youâ€™ve heard that Yahoo! has agreed to acquire Right Media (read Terry Semelâ€™s post here). This is fantastic news for both companies, Exchange members and the industry in general,” stated Michael Walrath, CEO of Right Media [Source: Right Media blog]. “Thereâ€™s still a lot of friction in this industry that prevents buyers and sellers from working together to everyoneâ€™s mutual benefit. I believe that the Right Media Exchange has done a lot to eliminate that friction, and this deal is a great catalyst to an even more efficient interactive ad market.”
“The acquisition, to us, is a key step toward executing our long-term vision to build the leading advertising and publisher ecosystem both on and off the Yahoo network,” stated CEO of Yahoo! Inc., Terry Semel in an interview [Source: NYTimes].
The deal will be closing within 3 months and will be paid for in cash and stock. This should alleviate concerns about the CEO of Yahoo! not making the right moves in competing with Google. Google turned down a $3 billion offer and social network, Facebook.com turned down a $1 billion offer from Yahoo!This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry