Yahoo Inc. is releasing more-detailed plans for an online-ad system aimed at increasing revenue from graphical display advertising, such as banner ads.
The effort is a bet that advertisers and Web publishers will be attracted to buy and sell Internet ads across a range of Yahoo and partner sites through a single system, with standardized means of targeting the ads at groups of consumers. The announcement Monday comes as Yahoo attempts to focus its activities and seeks alternatives to an unsolicited takeover bid by Microsoft Corp.
When released, Yahoo's system is expected to compete with efforts by Google Inc., Microsoft and others, some of which have acquired online-ad infrastructure companies in recent years to help build such systems. The system, which Yahoo calls AMP, is an attempt to bring together its own ad-sales systems and acquired activities.
Yahoo executives said they expected to begin releasing AMP in the third quarter for use by newspaper companies that are part of an existing Yahoo ad- sales consortium, and eventually extend it to additional Web publishers, advertisers, agencies and online-ad networks. The company said the system, in a future stage, will handle ad types besides display, such as search, mobile and video.
With the AMP system, Web publishers are expected to be able to manage the ads on their sites, as well as sell ads on behalf of other participants in exchange for a commission. Advertisers could buy online ads across a range of sites using standardized geographic, demographic and other targeting.
"That's huge in terms of reducing friction in the marketplace," said Rachel Happe, a research manager at IDC in Framingham, Mass., who was briefed by Yahoo on its plans. "If Microsoft buys Yahoo, they would be foolish to dismantle this, " she added.
Some analysts and investors have been skeptical of Yahoo's ability to deliver AMP -- previously called Project Apex -- on time. Yahoo struggled to deliver a major advertising-technology system called Project Panama that since its delivery has improved the amount of ad revenue Yahoo generates for each Web search.
"It's a larger undertaking than Panama was," said Michael Walrath, a Yahoo senior vice president. But he said Yahoo was "very confident" it would meet its expected deadline.
It is unclear whether any uncertainty generated by Microsoft's possible Yahoo acquisition could damp advertiser or Web-publisher adoption of AMP.
"Will there be bumps in the process? Sure there will be," said Jay Smith, president of Yahoo partner Cox Newspapers Inc., a division of Cox Enterprises Inc. "But based on what I've seen of Yahoo to this point, I think we'll get by those bumps."
Mr. Smith said he believed using AMP would help newspaper companies increase their online-revenue growth rates. Yahoo has 500 to 700 engineers working on AMP, he said. A Yahoo spokesman declined to comment on the number of employees involved.
By: Kevin J. Delaney
The Wall Street Journal; April 07, 2008
