• by Joe Mandese , February 4, 2008

If a bidding war is sparked by Microsoft's offer to acquire Yahoo, it will be rationalized largely on the online portal's dominant online audience reach and display advertising revenue share. But another big factor could be the underlying value Madison Avenue places on Yahoo, which commands advertising prices much higher than its closest online rivals, especially Microsoft's own MSN. With a massive $1.4 billion in advertising revenues, Yahoo accounted for nearly 20 cents of every dollar spent on online display advertising in the U.S. last year, and is more than three times bigger than its next closest competitors - News Corp.'s Myspace.com ($480 million) and Microsoft's MSN ($423 million) - according to an analysis of data Nielsen Online, JPMorgan and other industry sources published in the February issue of OMMA magazine. More significantly, at $12.65 per thousand unique users, Yahoo's advertising inventory commands the highest CPM of any of the 100 leading online display advertising players, with the exception of highly targeted CBSsports.com ($21.79).

Yahoo's CPM, in fact, is three times greater than Microsoft's MSN ($4.42), and 50% greater than News Corp.'s Myspace.com ($8.31). It's also about four times greater than AOL ($3.14), suggesting the Time Warner unit might indeed have a strategic imperative in hooking up with AOL.

While relative costs are obviously important from an advertiser's or an agency's perspective, the OMMA magazine analysis went a step further to look at the actual advertising yield each top publisher drew from every online page view they delivered. Those results are equally revealing: When divided by its massive 33.4 billion monthly average page views, Yahoo yields a revenue-per-thousand views (RPM) of just four cents, one-fourteenth the value of a targeted, high-end site like forbes.com (56 cents per thousand page views).

You'll find some surprising comparisons, like the fact that scurrilous online publisher The Drudge Report commands a CPM ($10.36) that is a third greater than nytimes.com's ($7.81). Whatever fits is now more valuable than what's fit. Go figure. Please keep in mind that the estimates we've compiled aren't gospel, but from a directional point-of-view, they're a pretty good indicator of how Madison Avenue truly values the inventory of the industry's leading publishers.

Site	Advertising Revenues	Unique Users (000)	CPM	Page Views (000)	RPM
Yahoo	$1,375.90	108,734	$12.65	33,425,115	$0.04
MSN	$422.80	95,594	$4.42	14,764,863	$0.03
AOL Media Network	$286.60	91,303	$3.14	7,836,853	$0.04
Myspace.com	$480.10	57,784	$8.31	30,900,015	$0.02
Weather Channel	$78.80	36,844	$2.14	900,176	$0.09
About.com	$35.80	35,948	$1.00	304,741	$0.12
MSNBC	$250.80	29,230	$8.50	727,221	$0.34
CNN	$71.70	29,144	$2.46	1,204,612	$0.06
IMDb	$78.80	20,653	$3.82	700,601	$0.11
ESPN	$136.20	17,371	$7.84	901,889	$0.15

Source: OMMA magazine estimates derived from data from Nielsen Online, JPMorgan, industry estimates.