Let's set aside all of the AOL (NYSE: AOL ) merging with Yahoo! (Nasdaq: YHOO ) chatter to discuss actual nuptials involving one of the companies.
Yahoo! announced yesterday that it's buying Dapper, a company that specializes in automating the display advertising process for sponsors. Dapper dives deep to single out the best product and even the appropriate bid to maximize an advertiser's campaign.
Is it a conflict of interest? Will Dapper ads now suggest higher bid prices within Yahoo!'s ad-worthy pages? Will Yahoo! simply shutter the service altogether and incorporate the technology into its own platform?
The first two questions are ridiculous, though they may come up from jaded marketers. The last question, though, carries a little more heft. Dapper claims that it goes beyond the typical behavioral targeting practices. It leverages context, semantics, location, and past performance.
Terms of the deal have not been disclosed, but if acquiring the small 4-year-old company makes Yahoo! smarter in its display stronghold, it's hard to argue against the purchase.
Everyone short of Microsoft (Nasdaq: MSFT ) appears to have conceded paid search to Google (Nasdaq: GOOG ) , so it's perfectly understandable to find Yahoo!, AOL, and IAC (Nasdaq: IACI ) trying to improve their display business.
The bigger deals lately have been on content. Yahoo! nabbed Associated Content. AOL turned to TechCrunch. However, increasing page views is just part of the equation. Devising schemes for milking more money out of every page view matters, and it's a win-win situation if it means placing a sponsor's ad in a situation where it's more likely to generate a conversion.
The market views Yahoo! as a laggard, despite its ability to generate a ton of web traffic. The rub for Yahoo! in the past has been that its visitors are landing on Yahoo! email or news-related pages that are tricky to monetize. When's the last time that you clicked on an ad while checking your inbox? Targeting is the differentiator. As long as a company can do it without coming off as overly Orwellian, this would be a good step for Yahoo! to gain investor interest in a move that doesn't involve an exit strategy.
What do you think Yahoo! should buy next? Share your thoughts in the comment box below.
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