Yahoo buys rest of Right Media for $680 million

Yahoo said Monday it will buy the remainder of Right Media that it doesn't already own. Right Media runs an online advertising exchange and is likely to give Yahoo an exit from working with DoubleClick, which is soon to be GoogleClick.

Yahoo will pay $680 million for the 80 percent it doesn't own already (see Techmeme discussion). In October, Yahoo bought a 20 percent stake. Right Media will get cash and stock equally.

The idea is that Yahoo will create an online advertising market place. In a statement, CEO Terry Semel said:

"The acquisition of Right Media will further Yahoo!'s goal to create the industry's most open, accessible and vibrant advertising marketplace, which will help democratize the buying and selling of digitally enabled advertising," said Terry Semel, chairman and CEO of Yahoo!. "This acquisition is an important step in our long-term vision to build the industry's leading advertising and publisher ecosystem. We believe that Yahoo!'s open approach is a clear differentiator from others in the industry and provides significant benefits to advertisers, publishers and Yahoo! itself."

Right Media is one way for publishers to monetize their inventory and it appears that this would beef up Yahoo's holdings ahead of the Google-DoubleClick deal. Yahoo CFO Susan Decker is already referring to her company as the "the industry's partner of choice and as a leader in both search and display advertising." Semel's blog talked about ad democracy. The message: Yahoo good; Google evil. I don't know if advertisers and publishers will buy it but the subtext is pretty obvious.

Yahoo is a DoubleClick customer and Right Media may give it a nice exit. From the statement:

Right Media's open exchange will facilitate a frictionless model where buyers have equal opportunity to engage with the largest, most valuable audiences and to extract the maximum value from their campaigns and sellers can access an enormous pool of advertisers and foster competition for their inventory to maximize revenue. Yahoo! will increase its participation in the Right Media Exchange both as a buyer and seller to help increase liquidity in the exchange while empowering publishers and advertisers to generate more value for themselves within this vibrant marketplace.

Key point there is that Yahoo will give Right Media a lot of liquidity. It remains to be seen if that's enough to grow Right Media exponentially. For Yahoo it's a nice way to monetize excess inventory.

The benefits outlined by Yahoo include:

• Advertisers will have greater inventory and audience options from Yahoo! and other participants in this exchange, as well as increased control and visibility into the buying process.
• Publishers will be able to bundle their own ad inventory with Yahoo's inventory and the exchange's inventory.
• The exchange will benefit those ad networks with unique value propositions, giving them an opportunity to compete with the largest players.
• Increased liquidity to allow advertisers to more efficiently ascertain the true value of display ad inventory, and generate greater returns for Yahoo's own display inventory. Yahoo can monetize low-rent inventory.

More on this deal later--there's a conference call at 8 a.m. PT.