Yahoo plans to buy Interclick, an online advertising company in the present competitive situation with Google and Facebook. Some experts say that the deal values about $270 million to help advertisers reach online users with more targeted messages.
Interclick is a New York based online advertising technology company founded in 2006.The acquisition is meant to help Yahoo to gain back its revenue which it is losing out on millions a year. Digital ad sellers are buying ad space on Yahoo and reselling it to other advertisers for a much higher price. Since Yahoo needs to improve its display advertising business, it is not a major acquisition for Yahoo according to some business analysts.
Interclick stockholders will get $9 a share, Yahoo said, a 22% premium to the stock’s Monday (31st October) close. The tender offer is expected to close by early 2012. Yahoo may use the purchase to revive sales of display advertising, such as banner ads, which stalled last quarter. The company is seeking a CEO after firing Carol Bartz, and has embarked on a strategy review as it grapples with competition from Google Inc. and Facebook Inc.
Kerry Rice, an analyst at San Francisco said “Interclick's behavioral targeting technology could help Yahoo to grow its display advertising revenue faster”. Also let’s hope that Yahoo could give Interclick more resources to expand into areas like mobile and video advertising.