Yahoo has acquired Interclick, which makes advertising targeting and optimization software, in a deal valued at $270 million.
The deal comes at an interesting time considering since Yahoo is often rumored to be an acquisition target. Interclick employees will join Yahoo and get an interesting ride to say the least.
According to Yahoo, Interclick will give it data targeting, optimization technology and more premium inventory to sell. Yahoo has been exploring an ad partnership with Microsoft and AOL to compete better with Google. That partnership would pool inventory into premium packages.
Interclick could serve as the glue if such an ad partnership were to develop completely. Yahoo noted in a statement that Interclick's team is "experienced in selling audiences across disparate sources of pooled supply."
As for Interclick's platform, it has two flagship tools---Open Segment Manager and Genome Platform---that integrate ad campaigns and data sources. On its site, Interclick notes that its Open Segment Manager (OSM) is designed to do behavioral targeting at scale. The company said on its Open Segment Manager overview:
The biggest challenge in data targeting was the perceived lack of scale. The scale issue partly stemmed from technical and statistical problems. But we also believed that "single algorithm" approaches had severe limitations. OSM's new multi-algorithm approach overcomes this by appropriately dealing with core statistical challenges faced in digital advertising: enormous dimensionality, sparsity, noise, rare events, and more.
OSM launched in late 2009.
Here's how Interclick's parts fit together.
The acquisition is expected to close in early 2012. Yahoo paid $9 a share for Interclick, which closed at $7.40 on Monday.