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Yahoo, Bebo Collaborate on Advertising
LONDON -- Yahoo Inc. said Wednesday that it agreed to collaborate on advertising in the U.K. and Ireland with social networking site Bebo.
Financial terms of the deal weren't disclosed, but Internet giant Yahoo will sell the majority of Bebo's display and video advertising in the U.K., the companies said.
Yahoo said the deal would "substantially increase" its advertising inventory and help it better target younger demographic users attracted to social networking sites.
Bebo, a closely held social networking Web site targeted primarily at teenagers and young adults founded in 2005, was the U.K.'s most popular social networking site in July, according to ComScore Networks.
Bebo had 10.6 million unique visitors in the U.K. and Ireland, and 18.2 million world-wide, growing 63% since the start of the year, ComScore said. However, its success in the U.K. hasn't been mirrored in the U.S. and in other countries, where it is dwarfed by sites such as Facebook and News Corp.'s MySpace, which are particularly popular in North America, and Orkut in Latin America.
The deal comes as Yahoo's new chief executive and co-founder, Jerry Yang, hired after the departure of former CEO Terry Semel this summer, conducts a strategic review of the company's operations. Mr. Yang has pledged to address Yahoo's stalled growth and flagging stock price, as its chief rival Google Inc. continues to expand its share of the Internet search market, and amid concerns the booming market for Internet display advertising may be cooling.
Toby Coppel, Yahoo's managing director for Europe, said in an interview that the deal with Bebo would allow the U.S. company to increase advertising yields through better targeting of consumers aged 13 to 30. Neither of the companies disclosed how much advertising revenue they make in the U.K.
Joanna Shields, Bebo's international president, said the company wouldn't pursue a path recently followed by Facebook of making user profiles available via search engines. Bebo takes a "cautious' approach to advertising, she said, generally adopting the principle of running no more than one ad per page.
The U.K. has the world's highest share of Internet advertising as a proportion of total advertising expenditure, according to the Internet Advertising Bureau, at 11.4% of spending, compared with a global average of around 5.8%.
Write to Jessica Hodgson at jessica.hodgson@dowjones.net
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