Yahoo to buy rest of Right Media for $680 mln

By Eric Auchard

SAN FRANCISCO (Reuters) - Yahoo Inc. said it would buy the rest of Right Media Inc. for about $680 million, in a move to boost the reach of Yahoo's advertising to social network sites, which marketers have struggled to reach.

Yahoo took a 20 percent stake last October in privately held, New York-based Right Media, which was founded in 2003.

Right Media focuses on direct marketing advertising, delivering high-volume ads to mass-market audiences such as MySpace users. It averages 4 billion daily ad impressions.

It complements Yahoo's focus on the premium ad market, where blue chip advertisers are offered guaranteed ad placement and precise demographic targeting, and its pay-per-click Web search business, where it is No. 2 behind Google Inc.

"I think this is kind of the third leg of the stool," Yahoo Chairman and Chief Executive Terry Semel told investors on a conference call on Monday following the announcement.

Shareholders of Right Media would be paid in roughly equal parts cash and stock, and employee stock options and other equity awards would be assumed by Yahoo, Yahoo said on Monday.

The deal is expected to close in the second or third quarter.

Analysts said the deal appears pricey in valuation terms but strategic in helping Yahoo shore up its display advertising business at a time when its premium ad business has been slowing. Shares dipped 2 cents to $28.32 in Nasdaq trade.