Yahoo and Newspapers – A Smart Media Move

The following is a guest post from Right Media CTO Brian O’Kelley:

Feedback on the Yahoo newspaper deal has started to trickle in, and what’s surprising is the limited attention this deal has generated in context of its effects on other industry players. Before I start to opine, please note that I have no inside information about this deal (even though I do work closely with Yahoo) and that these are my opinions as a pundit, not as Right Media’s CTO.

Much has been made in the last few years about Tacoda and Revenue Science and their ability to create behavioral profiles on newspaper and other highly contextual sites. For quite a while, it seemed like these guys were going to define the space. However, because they relied on their clients to sell the behavioral concept to agencies, they had to retool as network businesses. Meanwhile, a number of companies, like Yahoo, built their own BT profiles using proprietary data. With deep credibility and an existing customer base to upsell, they took BT from the fringe to the mainstream.

But Yahoo still lacked the powerful contextual source of data that the other players already had: newspapers. Fortunately, they had the agency relationships and credibility to help the newspapers realize the potential locked inside their context and user base. Look at the recent announcement in this context. Yahoo grabs a new behavioral data source to mine – and perhaps access to the inventory to resell behaviorally. How can Tacoda compete?

Take it to the next level. Why wouldn’t these publishers think about plugging in Yahoo’s entire ad serving capability? They’d get world class behavioral, contextual, inventory forecasting, and other technologies. They have leverage and credibility. They understand how to work with an existing sales force. Doesn’t that threaten 24/7 in their core market? Doesn’t this make it that much harder for Google and other networks? And what about MSN, who’s still not really in market?

Why is the market bashing Yahoo? This is brilliant. I’m hesitant to even bring attention to it, because I’d rather see them just finish the play, but the market needs to recognize that they’re playing the media game better than anyone else. And you don’t have to be perfect on the technical side to win in media – you can partner for that, and leverage the best of breed where you can.

Just my 2 cents.

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