Akamai's EdgeScape service correlates geographic and network information to Internet protocol addresses, without compromising user privacy. Based on this information, Yahoo can select which ads to insert on its pages.

"We're pleased to be playing a part in Yahoo!'s successful business by providing the intelligence for creating a more exact match between relevant content and users' needs," said Paul Sagan, Akamai's president.

Yahoo, of Santa Clara, Calif., and Akamai, of Cambridge, Mass., have been doing business since early 1999 when Yahoo singed on as a charter customer for Akamai's content and application delivery service.

"Akamai continues to remain a valued service provider and technology development partner to Yahoo," said Farzad Nazem, Yahoo!'s CTO.

The deal was announced before markets opened. On Tuesday, YHOO closed at 19.14 and AKAM was at 7.41, both well off 52 week highs.