Yahoo Partners With Ad-Holding Company WPP - InformationWeek

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Yahoo Partners With Ad-Holding Company WPP

The deal is the latest between a major Internet portal and a holding company looking to extend its influence in the online ad world.

Yahoo and ad-holding company WPP Group said Friday they have formed a partnership to make it easier for WPP agencies to buy ads across the Web.

The deal is the latest between a major Internet portal and a holding company looking to extend its influence in the online ad world. In January, Google and French ad holding firm Publicis Group entered into a similar agreement.

In the Yahoo deal, the portal will work with agencies of London-based WPP in building technology to connect to Yahoo's Right Media, an electronic exchange for advertisers and Web sites to buy and sell ad space. Yahoo will also help build a WPP marketplace that will draw inventory from Yahoo's owned and affiliated networks, as well as from third party publishers. The Yahoo-WPP agreement is non-exclusive.

"More and more, we see the need for agencies and media and technology companies to work together to create a new level of value," Mark Read, WPP's director of strategy and chief executive of WPP Digital, said in a statement.

Yahoo is struggling to catch Google in the online advertising market. Google dominates search advertising, which ties sponsored links to results returned on people's queries. Yahoo is stronger in the smaller display advertising market. That market, however, is expected to grow over the next few years as more advertising is tied to online video. As the market grows, Yahoo will face stiffer competition from Google and Microsoft.

In 2007, search advertising accounted for 41% of the online ad market, followed by display advertising at 21%, according to the Interactive Advertising Bureau. Classified ads comprised 16% of the market, while all other categories amounted to less than 10% each.

Total Internet-advertising revenues last year reached $21.2 billion, a 26% increase from 2006, the trade group said.

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