Smart Ads: Yahoo! (YHOO) Late Again

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Yahoo! (YHOO) is hoping that a new technology called Smart Ads will makes its display advertising more attractive to marketers. The product allows an advertiser to give a broad array of creative units for its product or service to the portal company, and these are served to the web visitor based on that person’s search behavior.

According to The Wall Street Journal "Yahoo makes heavy use of data about its visitors to target ads." Privacy groups take notice.

The trouble with the Yahoo! program is probably that it is the Holy Grail that AOL, MSN, and Google (GOOG) are all seeking. The purchase of ad serving companies like DoubleClick and Advertising.com is, to some extent, based on the idea that large databases of inventory matched with individual consumer behavior will yield more efficient advertising. And, the internet companies can charge more for that.

Yahoo! has a reputation of being late in most of its new initiatives. It let the search business go to Google without improving its own technology. It has lagged in social networking and user-created video.

With every other big internet company moving in the same direction, Yahoo! is just part of the crowd.

Douglas A. McIntyre