Advertising Week 2008

Yahoo Introduces New Ad Platform, but Will It Need AOL?

CEO Yang Says Apt (Not Apex or Amp) Will Be First Stop for Advertisers, Doesn't Answer Acquisition Rumors

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NEW YORK (AdAge.com) -- Jerry Yang responded to the question of whether his company is again interested in AOL with a big, fat maybe.
Jerry Yang
Jerry Yang Credit: Zang Liwen

"I haven't read it," he admitted, when asked about a piece in today's Financial Times that said Yahoo's board had agreed to open a new round of discussions over whether it should acquire Time Warner's iconic portal, AOL. But the article also said discussions were not actively under way.

The Yahoo CEO was on hand in New York to announce the deployment of his portal's new ad platform, initially nicknamed Apex (advertise-publisher exchange) when it was first disclosed in February. Over the summer it was unveiled as Amp, only to be rechristened today as Apt. (And that would be apt, as in "unusually intelligent; able to learn quickly and easily" -- not an abbreviation for apartment.)

Does Yahoo need AOL?
The San Francisco Chronicle and San Jose Mercury News are using the platform, which is built on the bones of the Right Media Exchange. Apt is a networked version of an ad-serving system and lets both Yahoo and the papers sell ads across it. The system will be rolled out to the rest of Yahoo's newspaper consortium members through the year and to advertisers and agencies in 2009. (The consortium lets Yahoo sell across newspaper sites and allows newspapers to sell Yahoo's inventory.) It's a big undertaking -- essentially going against category leader DoubleClick as well as the WPP Group-owned 24/7 Right Media and Microsoft's Atlas ad-serving platform.

So does Yahoo need such an acquisition as AOL to make its ad platform work?

Answered Mr. Yang: "My view is that we are in an extraordinary time, where if you look at Yahoo and look at our consumer reach, it's at an all-time high. We feel our consumers are engaged in Yahoo in a way that's at an all-time high. We are busy developing industry-type platforms, not just those that work for Yahoo but those that work for everybody. I think our road ahead on our own is very, very compelling."

OK, so Yahoo doesn't need to make any acquisitions?

"Well my point," he said, "would be that, to the extent there are opportunities to enhance our leadership and strategy, we have to look at them. That's my job and the board's job. But I will say these rumors with AOL have been out there for a long time so there's nothing changed on that perspective."

Crucial in economy
Mr. Yang seemed eager to talk up Apt as Yahoo's new strategy, and he and Yahoo's new head of sales, Joanne Bradford, said that being an advertiser's first stop is even more important in an economic downturn. A slowing economy is also likely to trigger the newspapers to adopt the Apt platform more quickly, he said.

"As people understand our strategy more and what we talked about today with Apt, people will see that 'Hey, we see where Yahoo's going,' and maybe things will make more sense or less sense," he said. "We certainly see that there's a lot more publishers now. This is maybe the market part of it but we're on the street every day competing with our competitors. Advertisers are gravitating to the high-quality, high-reach category leaders and right now Yahoo is still one of the places they go to, and they'll probably not go to other places first. That position is very important to us."
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