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Yahoo Builds Ad Buzz Before Financial Results

Hours before releasing its third quarter financial results, Yahoo today announced an acquisition and a major investment meant to improve its oft-criticized ad business.

Yahoo bought AdInterax and took a 20 percent stake in Right Media, creator of the Right Media exchange, according to statements.

Yahoo said it bought AdInterax for its technology.

The acquisition will enable Yahoo to provide marketers a streamlined process for building rich media formats, including floating animations, expandable banners and streaming videos, as well as new campaign management tools at no charge, the company said.

Yahoo did not disclose financial details of the deal.

The Right Media Exchange is an online exchange for publishers and advertisers. Yahoo said it will participate in the exchange.

"Yahoo is constantly looking for new ways to connect advertisers with audiences," Yahoo vice president of sales operations Todd Teresi told internetnews.com. "This expands the channels."

Specifically, Yahoo will make "non-premium" ad inventory available on the exchange.

A spokesperson defined "non-premium" as advertising that would not benefit from Yahoo's many targeting technologies.

The spokesperson said, for example, that marketers would not see ad space from a page in Yahoo's automotive section available on the exchange.

It makes too much sense for Yahoo to sell that inventory to car makers at a premium.

Yahoo's investment in Right Media Exchange is part of $45 million in Series B financing for the smaller company.

"We've had ongoing discussions with them over the last year. I think we've known for a while that we see the world very similarly," Right Media CEO Mike Walrath told internetnews.com.

A Yahoo spokesperson told internetnews.com that neither the AdInterax acquisition nor the Right Media investment should be interpreted as moves meant to counteract recent Wall Street pessimism regarding Yahoo's advertising business.

All that started at the end of the last quarter when Yahoo's profit drop disappointed investors almost as much as the company's delays in bringing its search-marketing product, code-named Panama, to market.

Search marketing was the key element in last year's 30 percent online ad revenue increase.

Yahoo CEO Terry Semel didn't help the negativity with his public pessimism concerning his company's slowing advertising sales earlier this fall.

Yahoo will announce its third quarter results later today.