Yahoo Completes Deal with Bebo for Online Advertising

Internet giant Yahoo Inc. completed its first business arrangement with a social networking site. It is all set to sell display advertising for social networking site Bebo Inc., according to an announcement made by Yahoo and Bebo on Wednesday.

The deal with Bebo allows Yahoo to sell display advertising for the social networking site in two countries where it is immensely popular, U.K. and Ireland. Site traffic data from comScore Networks Inc. shows 75 percent of Internet users in these two countries use Bebo.

Most Bebo users in U.K. and Ireland countries are in the age group of 13 to 24 years. By selling Bebo display advertising in these two countries would give it access to 11.6 million users each month.

Yahoo and Bebo have already been working together to an extent. Yahoo was supplying search data for Bebo before the deal came through. Now with the deal through, plans are afoot to bring out a customized toolbar. The toolbar would allow users to keep track of all that was happening at the site when they were away from it.

Other collaborative measures between the two include Bebo incorporating the Answers feature of Yahoo. This feature allows users to rank the questions posed by other users and also provide answers for them.

Basically, Yahoo’s deal with Bebo will enable the networking site to have access to superior capabilities in terms of ad targeting. Toby Coppel, the managing director of Yahoo Europe said now Bebo users will see ads on their networking site based on the websites they have been seeing.

Yahoo has been investing in companies of strategic interest to it. Just last week, Yahoo had said it was putting up $300 million for BlueLithium Inc. BlueLithium is a company that sells banner ads on the Internet, and has a clientele of almost 1,000 websites. Earlier, in April this year, Yahoo picked up Right Media Inc. for a cool $680 million.

The deal with Yahoo means Bebo can now use its direct marketing team to concentrate on working out integrated sales and marketing strategies with their partners and prospective customers. Yahoo will be taking up the responsibilities earlier being shouldered by this team.

The deal comes at the right time for Yahoo. It has been recently going through a series of upheavals, from the exit of senior management executives owing to structural reorganization announced in December 2006 to depleting revenues.

As a result of these changes and reduced revenues, Yahoo has followed the path taken up by its competitors Google and Microsoft, of grabbing a share of online ad revenues.