Yahoo! Extends Their Network

There has been lots of discussion about the deal announced yesterday between Yahoo! and eBay.  It’s a big deal in many ways and showcases the classic line about "the enemy of your enemy is your friend".

In my mind, based on a very cusory read of the outline of the deal, while it does seem to be a win/win, it strikes me as a much bigger win for Yahoo!.

The thing that struck me most about the deal is that this is the first time Yahoo! has sold banner inventory outside of their network. Yahoo! is becoming a third party banner network in addition to becoming a contextual ad network.

It’s a smart direction for them to take and starting off with eBay seems like a good way to go. I am not familiar with the specifics on the advertising deal, but if Yahoo! gets the right to sell banners throughout the eBay service, then they have just increased the size of their network by 33%, from 37bn page views per month to 50bn page views per month (Comscore Media Metrix data).

That seems to be quite a deal for Yahoo!.

#VC & Technology