Bebo is the largest social network you never heard of, and Yahoo! (NASDAQ: YHOO) has locked up exclusive rights to sell display ads on the site's UK and Ireland sections. That will add 11 million unique users to the Yahoo! ad network. Bebo said its is interested in Yahoo! handling its business worldwide. That would bring Yahoo! a total of 38 million users to add to its display arsenal.
Yahoo! management told Reuters: "It's a core step for us in building up the largest and most effective advertising network. It's a big deal." Bebo says it picked Yahoo! because of its ability to target display ads based on things like user behavior.
While the deal is clearly good for Yahoo!, it merely pushes it further into the slowing market for display ads. Industry experts expect internet advertising to rise 25% in the current quarter, with the fastest growing part being text ads in search results. Display is expected to lag well behind.
For Yahoo!, Bebo is a good deal in the weak end of the online market.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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