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Yahoo Unveils Online Ad Network

Yahoo (NASDAQ: YHOO) on Sunday detailed plans for its forthcoming Web advertising management system that gives its ad-sales partners access to online ad space both on Yahoo and other major sites.

The widely anticipated system, known as AMP, aims to simplify the process of buying and selling online ads for advertisers, ad agencies, fast-growing ad trading networks and Web site publishers.

The ad management system seeks to capitalize on Yahoo's strength as a Web site publisher that reaches 500 million Web users monthly and recent efforts to sell ads off of Yahoo through major partnerships or specialized ad-sales networks.

The planned advertising system, formerly code-named Apex, is the linchpin of the company's strategy to reach outside its own base of users and increase its position as the "must buy" location for online advertisers.

While the strategy remains in its early stages, AMP is one of the products Yahoo management believes will help propel the Web pioneer's next wave of growth.

It is also one factor behind Yahoo's reluctance to accept Microsoft Corp's unsolicited takeover bid currently valued at $42.4 billion, which executives believe undervalues the company's assets.

"This is really about creating a massively networked advertising ecosystem," Yahoo advertising executive Mike Walrath said in an interview. Walrath founded Right Media, an ad sales exchange, in 2003 and sold it to Yahoo last year.

AMP will be introduced in stages starting in the third quarter of this year, Yahoo said. It aims to give individual sites the capacity to sell ads across the Web, replacing single-site systems that still use e-mail and even faxes.

The move also is a response to major competitors Google (NASDAQ: GOOG) and Microsoft (NASDAQ: MSFT), which have each acquired major competitors in the market for sales of online display ads used by corporate brand marketers. Google closed its $3.4 billion acquisition of ad sales management firm DoubleClick last month. Microsoft paid $6 billion for aQuantive last May.

AMP is a suite of tools that offers precise geographic, demographic and interest-based targeting across a vast network of Yahoo sites and ad sales deals Yahoo has struck with more than 600 newspapers, Comcast (NASDAQ: CMCSA) and eBay (NASDAQ: EBAY).

It also includes niche Web sites such as WebMD (NASDAQ: WBMD), Forbes, the major ad networks, and thousands of smaller sites on the Web.

In its initial stages, AMP is designed to expand the reach of dedicated sales forces at newspapers or sites such as WebMD to allow them to reach many times larger audiences outside of their own sites, where they can cross-sell their advertising.