I can’t really comment on all the Microsoft and Yahoo! news as a Yahoo! employee, but I’m not sure I really have anything terribly interesting to say about it anyway. It’s just been an interesting few days reading all the news and analysis, and it looks like it will be an interesting 2008 to see how everything shakes out.

I’m working on an Online Advertising Predictions for 2008 post, and what’s funny is how rapidly some of my predictions change depending what happens. It may be a tough year to predict now.

Scott Karp kicked off the new year with a good post called Five Guiding Principles For The Transformation Of Media Companies. It’s a good post that needs to be read by every executive at major media companies today, and in many ways a lot of it seems like common sense to those who have been watching the transformation occur and understand what’s going on.
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Techcrunch comments on the “Nothing but Net” report released by JP Morgan that discusses the prospects of online powers who derive a majority of their revenue from advertising.

There are a number of interesting items in the report, but the one that hits closest to home for me is their prediction that display advertising CPM prices will rise from their bottom in 2007 of $3.31 to $3.86 by 2011 through increases each year. The question is, will this occur?
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My employer announced today that we’ve bought Blue Lithium, one of the top five ad networks in the USA and the 2nd largest network in the UK.

This is exciting for a couple of reasons:

1. Allows one of the largest ad networks in the world to begin buying and integrating with the Right Media Exchange providing more demand and publisher supply. Adding Yahoo!’s inventory and advertiser demand to that of Blue Lithium’s and all the advertisers, publishers, and ad networks already participating is creating a vast and very liquid exchange.

2. Yahoo! is positioning itself to truly be a holistic advertising powerhouse, and is leaving no doubt who will lead the display advertising space. It’s going to be fun.

I’ve talked a lot recently about the big dogs out there snapping up advertising companies.

However, it’s not just the huge players who are consolidating advertising companies. MediaWhiz out of New York completed their second acquisition of the year by purchasing AuctionAds.
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Are things getting crazy in the online ad space or what? AOL buys Tacoda a few days ago, and now Microsoft has purchased ad exchange AdECN for an undisclosed amount. I didn’t think I’d have to update my chart from my Battle of the Online Advertising Superpowers post, but perhaps I might.

Who’s next?

As I’ve posted about before, there is a battle for online ad supremacy that’s quickly turning into a battle of superpowers. AOL just made the next move in the chess match with the acquisition of behavioral targeting display network Tacoda.

It’s definitely and interesting move as AOL already owns the largest display ad network in Advertising.com, which is also known to have behavioral targeting capabilities. This would lead me to believe that Tacoda’s behavioral targeting is superior than Advertising.com’s, or that AOL was simply after more advertisers, publishers, and people. Most likely it’s a combination of both.
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