Just An Online Minute... Yahoo Purchase Brings Up UGC Issues

by Wendy Davis, Apr 30, 2007, 1:45 PM

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In another sign of consolidation in the online ad space, Yahoo has agreed to purchase the remaining 80% stake of Right Media for $680 million. Last year, Yahoo purchased 20% of the 4-year-old company for $40 million.

Yahoo chief Terry Semel told The Wall Street Journal that the deal will help the company "generate greater returns for our own nonpremium advertising inventory," while also enabling Yahoo to add Right Media's 1,000-plus publishers to the Yahoo ad network.

News of the deal comes just several weeks after Google agreed to pay $3.1 billion to win a bidding war for DoubleClick -- a move that should give Google a boost in building out its own ad network.

Both deals obviously should create some efficiencies for marketers that want to advertise on non-premium inventory, including pages on blogs and other user-created sites.

But the consolidation doesn't address the larger question of whether big brands view user-created Web pages as right for their ads. User-generated content is unpredictable and often inflammatory -- that's a big part of what makes it interesting. But for marketers, those qualities are rarely an advantage.

Even some consumers -- both the ones who create content and those who visit user-generated sites -- are saying that ads don't always belong on social sites. Some already say they resent ads or other corporate promotions on sites like MySpace and Second Life. As long ago as last summer, MySpace members griped about a marketer influx on the site.

That's not to say that there's no place for ads on non-premium inventory. Obviously there is, but it's very limited, and not even deals like Yahoo's acquisition of Right Media will necessarily change that.

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