Yahoo's ad deal with Bebo in doubt following sale

by Media Week, Media Week 18-Mar-08

AOL's acquisition of Bebo could spell the end of Yahoo's deal to sell ads around the social network, according to some observers.

When it was announced last September, Yahoo's deal to sell the majority
of advertising to Bebo was a major boost to Yahoo. Although the terms of
the deal were not disclosed, it is likely to be lucrative for Yahoo.

When Google landed the contract to sell ads around MySpace in 2006, it

agreed to pay the News Corporation-owned site $900m in guaranteed
revenue by 2010.

Bebo president Joanna Shields refused to speculate on the future of the
Yahoo deal, saying it was "too early to talk about existing relations
with other partners". But there is little doubt among some observers
that Yahoo's deal will be terminated.

A Microsoft source said: "Yahoo is going to lose that deal - there's no
way AOL will want them involved."

AOL is building its own ad network, Platform A, which includes a host of
ad networks such as Buy.at. The success of Platform A is central to
AOL's new strategy of focusing on becoming an advertising network,
rather than a content destination and ISP. The addition of Bebo
strengthens this ambition.

The fear for Yahoo now, according to observers, is that there is no
strong social media property left on the market to buy that would pull
it on a par with AOL, News Corporation or Microsoft. Analysts believe
LinkedIn could be the next biggest social media site to be sold.

Shields added: "At the moment, everything stays the same. It is a
two-year deal and we have a great relationship with Yahoo."

ADVERTISING REACH

MICROSOFT

- aQuantive: Ad platform

- Atlas: Ad platform

- Drive PM: Ad network

- Multimap: Online map service

- Screen Tonic: Mobile ad sales: house

- Avenue A: Digital agency

AOL

- Bebo: Social network

- AdTech: Digital marketers