Flash: Yahoo! (YHOO) buys ad network BlueLithium

Yahoo! (NASDAQ: YHOO) will acquire ad network and targeting firm BlueLithium for $300 million. The web portal company describes its new division as one of the largest and fastest growing online global ad networks that offers an array of direct response products and capabilities for advertisers and publishers.

In other words, Yahoo! has purchased another company to expand its network of partner web sites. CEO Jerry Yang put it this way: "This acquisition will extend our ability to deliver powerful data analytics, advanced targeting and innovative media buying strategies to our customers, who are increasingly looking for these insights. By leveraging BlueLithium's complementary expertise and tools, we will be able to better address the needs of our performance-based display advertisers and enhance the value of our publishers' inventory."

The BlueLithium network covers 145 million unique visitors each month.

What this means is that Yahoo! is getting deeper into the display advertising business, hoping that targeting software can begin to reverse the slide of dollars that are moving to search-related ads. It is probably not a good idea. At this point Microsoft (NASDAQ: MSFT) and AOL have entered similar businesses, and it is unclear how this will help them ramp up online ad growth rates beyond the 10% to 20% where they stand now.

Investors would be silly to get overly excited.

Douglas A. McIntyre is a partner at 24/7 Wall St.