Bebo, which describes itself as the No. 1 social network site in the UK and Ireland, has struck a deal with Yahoo that marks the Internet portal's first major agreement with a social-networking site. The ad deal includes direct sales
for a majority of Bebo's display ads.
Bebo was founded in 2005 and has an audience of some 11 million users. Yahoo will continue providing the search features on Bebo as part of an arrangement the companies first made in May. The terms for the new deal were not disclosed.
Bebo has a policy of only one ad per user profile, so as not to deluge its users, so it makes sense that Bebo would want to garner the most revenue per ad. Yahoo's growing global ad network and technology could help.
Yahoo Answers, Toolbar
The pact also could help Yahoo, which has been dealing with slipping revenues and management turnover. Several senior managers have left since its major reorganization, and cofounder Jerry Yang took over CEO responsibilities from Terry Semel in June.
In addition to including ads, the deal entails a partnership on Yahoo Answers and a toolbar. Answers, a knowledge-service community with a worldwide audience of 84 million, will be integrated into Bebo so that its users can ask and answer questions posed by other Bebo visitors.
For those users who do not already get enough Bebo, the companies will develop a toolbar that can monitor the social-networking site even when users are busy somewhere else on the Net.
But those users will have to work hard to be "somewhere else" than on pages involving Yahoo or Bebo. In the UK market, the combined reach of these companies is reportedly huge. According to Yahoo, the companies have 11.7 billion page views each month, which "represents 75 percent of the UK Internet user population."
Growing Yahoo Ad Network
To turn its reach into revenue, Yahoo is pushing hard to grow its ad network and leverage the value of its ad targeting tools.
Last week, Yahoo announced that it was acquiring BlueLithium, which sells banner ads to about a thousand Web sites, for around $300 million in cash. In April, Yahoo agreed to buy the part of Right Media that it didn't already own, for about $680 million. Right Media provides a marketplace for advertising space on Web sites.
Joanna Shields, president of Bebo International, praised Yahoo's "scale, experienced sales force, advertiser relationships, and industry leading online advertising capabilities," and said that, with the Yahoo partnership, the site can focus on "custom sponsorship campaigns and groundbreaking original productions."
Original productions from Bebo include Sofia's Diary, a "cross-media interactive" created with Sony Pictures Television, featuring a real-time teen series that uses blogs, videos, mobile, TV, and other media. It will launch this fall.