Yahoo, WPP in Multiyear Partnership on Ad Trading

Embattled Yahoo (NASDAQ: YHOO) has struck an advertising partnership deal with WPP Group (NASDAQ: WPPGY) that will let WPP buy ads on Yahoo’s online ad exchange, the companies said late on Thursday.

Yahoo, which recently spurned a $47.5 billion unsolicited takeover bid from Microsoft (NASDAQ: MSFT) only to face a proxy battle led by activist investor Carl Icahn this week, said the deal would first involve WPP units GroupM and 24/7 Real Media.

In a statement, the companies said that as part of the deal, WPP advertising agencies would, through its 24/7 Real Media arm, develop a proprietary advertising media trading platform that takes advantage of Yahoo’s Right Media exchange.

Yahoo acquired Right Media last year in a bid to expand sales of the online display advertisements preferred by corporate brand marketers beyond its existing base of blue-chip clients to social network sites and other sites off Yahoo.

“More and more, we see the need for agencies and media and technology companies to work together to create a new level of value,” said Mark Read, director of strategy and chief executive of the London ad conglomerate’s WPP Digital unit.

WPP will also work with Yahoo to develop a WPP marketplace, giving WPP’s ad agencies wider access to potential advertising inventory, or places to advertise, across the Internet, as well as insight into how to buy ads cost-effectively for clients.

The WPP-Yahoo marketplace will also be open to outside publishers, helping to increase the overall volume, while cutting the costs, of the WPP ad-trading marketplace.

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