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Yahoo to sell UK display ads

Yahoo’s latest move for dominance in the Internet advertising market was made overseas. Last week, it announced that it will sell most of the display advertising for Britain’s popular online social network, Bebo.

Bebo has an estimated 11.6 million users. The agreement covers the sale and serving of display advertising, integration of Yahoo Answers and a toolbar for users to manage their Bebo activities.

Yahoo media relations representative Grant Thomas said US advertisers can target British Bebo users as a result of this partnership.

“Bebo is the No.1 social network in the UK & Ireland and has become the online destination for the elusive 13- to 24-year-old demographic,” said Joanna Shields, president, international at Bebo.

“The partnership with Yahoo enables us to focus on custom sponsorship campaigns and groundbreaking original productions with the knowledge that our display advertising is handled by a partner that guarantees the highest quality ad for each user interaction,” Shields continued. “Yahoo’s scale, experienced sales force, advertiser relationships and industry-leading online advertising capabilities will allow us to do just that.”

Yahoo Answers will be integrated into Bebo’s site, allowing users to ask and answer questions posed by other users within the Bebo community and beyond.

Toby Coppel, managing director of Yahoo Europe, said this partnership is the next step of Yahoo’s ongoing strategy to build the largest and most effective online advertising network.

Yahoo and Bebo have also announced the development of a new Bebo Toolbar enabling Bebo users to monitor their social network even when they are not on the Bebo site.

“The integration of Yahoo search, Yahoo Answers and the new Yahoo/Bebo toolbar is a good move for Yahoo,” said SEMDirector’s senior director of search engine strategy, Martin Laetsch.

Financial terms of the deal were not available.

“It will help get its brand in front of a new audience and may [well] justify whatever Yahoo had to pay for this deal,” Laetsch said.

Bebo, launched in 2005, has been the source of many acquisition rumors – most notably with Viacom. In May there was a rumor that Yahoo was looking to buy the social site for $1 billion.

This announcement comes on the heels of last week’s news that the Web giant struck a deal to buy BlueLithium, the fifth-largest US online advertising network, for $300 million in cash – a deal that expands Yahoo’s share of the display and advertising market to include an additional 145 million unique visitors per month.

“This deal is a nice complement to the other deals Yahoo has made recently: online ad exchange Right Media Inc., direct marketing network BlueLithium, etc.,” Laetsch said. “It should help Yahoo stay competitive in the UK as advertisers look for additional ways to reach audiences online.

“This deal won’t have a direct impact on the US market due to Bebo’s small market share here,” Laetsch added. “However, this deal (along with the Blue Lithium deal) will likely accelerate Yahoo’s SmartAds program, which will benefit advertisers and help Yahoo compete more effectively in the US for online display advertising.”

Yahoo rivals Google and Microsoft already have ad agreements with social networks. Google has a partnership with MySpace and Microsoft has one with Facebook.

“This deal should help Yahoo broaden its appeal with advertisers looking to connect with a younger audience that tends to spend more time on social networking sites instead of the more general sites like the Yahoo properties,” Laetsch said.

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