Yahoo Preps Online Ad System as Microsoft Looms

Yahoo introduces AMP as its new way to gain market share in the online ad arena. Meanwhile, Microsoft is losing patience.

Even as Microsoft CEO Steve Ballmer and Yahoo CEO Jerry Yang are sparring back and forth about Microsoft's acquisition offer, Yahoo managed to introduce an ad management platform as the new model for how to let companies buy and sell ads on the Internet.

Unveiled April 7 and built with some of the assets Yahoo gained when it bought Right Media for $680 million last year, AMP aims to let markets buy search, display local mobile and video ads from one user interface.


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This is a departure from traditional industry practices by Google, Yahoo and Microsoft of selling ads in different buckets based on ad type.

Yahoo officials said in a statement AMP will deliver more relevant advertising to consumers across the Web with more precise geographic, demographic and Web-based targeting across Yahoo properties, partner properties such as eBay, Forbes, AT&T and more than 600 U.S. newspapers in the Newspaper Consortium.

IDC analyst Rachel Happe said standardizing demographic, geographic, behavioral and pricing options across these networks and allowing the ad buyer to make one purchase across a huge number of sites is a big deal.

"It seems to make intuitive sense and yet it does not exist broadly today," Happe wrote in a research note April 7. "Having Yahoo rationalize the various different buckets across hundreds of sites makes the ad buyer's job much easier and will drive more purchases across a larger range of properties."

Self-Service Ad Management

AMP will let advertisers select audiences from across multiple sites and networks and create campaigns that span one-to-one marketing, niche targets and broader audiences. Ad agencies, meanwhile, will be able to continue to design in their favorite creative tools so they don't have to learn a new system.

Because AMP provides a content management portal for creative teams to upload the ad elements themselves, the feature eliminates a huge amount of the back-and-forth work done during the ad creation and approval process, Happe noted.

Overall, Happe said AMP will likely be a big hit with ad buyers and publishers alike, assuming the company delivers the platform on time and is adopted en masse by customers and partners.

This could prove tricky. Yahoo is waging an icy war of words and wills versus Microsoft in the wake of Microsoft's $31 per share purchase offer, which was worth $44.6 billion when it was issued Feb. 1 but is currently around $42 billion.

Yahoo has sought help in the form of other deals, but somewhere along the way in its failure to strike an agreement, Microsoft has grown impatient.

Microsoft's Ballmer April 5 wrote to the Yahoo board of directors reiterating that Microsoft's offer was fair and threatened to trigger a proxy fight if the two companies couldn't hammer out a deal by the end of April.

Yahoo's Yang responded April 7 with the company's mantra that the current offer undervalues the company; Yang even pointed to AMP, which is just getting off the ground, as one of the assets that makes Yahoo more valuable. But will Yahoo have the opportunity to prove it?

AMP will roll out in phases beginning with members of the Newspaper Consortium in Q3 2008. The Sunnyvale, Calif., company plans to extend both the functionality of the platform as well as participation to additional publishers, advertisers, agencies and ad networks through the rest of 2008 and into 2009.

Those interested may view a video demonstration of AMP here.