Congrats to Brian O’Kelley and the rest of the Right Media team on the news that Yahoo has acquired them in a deal worth $800 million (Yahoo had already owned 20% and is acquiring the remaining 80% for $680 Million).
I remember having breakfast in New York with Brian, their CTO, a few years ago hearing about this new pet project of his to create an exchange or marketplace for internet advertising whereby the system would algorithmically match buyer with seller in real-time according to what would perform the best. Think of it like a NASDAQ for internet ads. I agreed to participate in a test of the system on behalf of Live365 and remember thinking that, though early, this would be a model for the future of commoditized internet inventory. Well the Right Media folks have proved their model and have been richly rewarded for doing so. Congrats on that.
I don’t know enough to comment on the valuation but I’m sure this is a highly strategic deal for Yahoo given their recent launch of Panama (for search inventory) and I have to imagine that Google’s intended purchase of DoubleClick had an impact on the timing and valuation of the deal.
Updated: The Google-DoubleClick deal almost certainly drove up Right Media’s valuation. Consider that last October Yahoo! and Redpoint invested $45 Million into the company. The valuation would have been $150 Million if that amount bought 30%. Others estimate it at $225 Million at the time. Whatever it was, the $800 Million acquisition is a great outcome for the investors and the Company. It also wouldn’t surprise me if Microsoft figured as a potential acquirer.