Yahoo Inc announced on Wednesday an exclusive partnership with Bebo to manage display advertising on the social networking Web site in Britain and Ireland, giving it access to more than 11 million sought-after users.
The two groups said under the agreement Yahoo would sell the majority of the display and video advertising on Bebo, the UK and Ireland's most popular social networking site.
The site has an estimated 11.6 million users in the two countries and 38 million users worldwide. Joanna Shields, president of Bebo International, told Reuters she would be keen to expand the agreement globally.
We think this is a groundbreaking move in the online advertising industry in the UK and Ireland, Toby Coppel, managing director of Yahoo Europe, told Reuters.
It's a core step for us in building up the largest and most effective advertising network. It's a big deal.
The deal marks further momentum in Yahoo's campaign to add other major Web sites to its ad network instead of the rival networks of Google Inc and Microsoft Corp.
Financial terms were not disclosed and the length of the agreement was described as multi-year.
Under the agreement, Yahoo will also integrate the community-driven knowledge service Yahoo Answers into the Bebo site and provide a new Bebo toolbar that allows users to monitor their social network when they are not on the site.
The two groups said advertisers would benefit from the combination of Bebo's highly engaged audience with Yahoo's insight and ability to target consumers.
Social networking sites such as Bebo, Facebook and MySpace are hugely popular with younger Web users -- an important yet hard-to-reach category for advertisers -- but media groups have struggled to convert their soaring popularity into revenue.
Bebo say its average user ranges from 13 to 24 years old and spends 40 minutes on the site each day they log on.
Shields said they had chosen Yahoo because it could target consumers with appropriate adverts.
In an environment like Bebo where our users are our core constituency, we had to be sure that the ad partner that we selected could deliver a targeted ad that was going to complement the experience of the social network, she said.
Bebo's sales team will continue to work on offering sponsorship and marketing solutions, such as the brand integration available through its online drama, KateModern.
The deal is likely to be seen as a good win for Yahoo, the market leader in display advertising, which is making a major push to expand the percentage of advertising that occurs off the Yahoo network of properties.
It has made two acquisitions this year -- Right Media and the yet-to-close BlueLithium deal -- to bolster the Internet media company's ability to deliver ads to non-Yahoo sites.
A year ago it struck a deal to handle advertising for eBay Inc in its core U.S. market; Yahoo supplies a broad consortium of U.S. newspaper publishers with online ads; and along with Comcast Corp, it supplies ads on the Web sites of the largest U.S. cable television network operator.
Yahoo already had an agreement to provide search services on Bebo, and this was extended. The new initiatives outlined on Wednesday are set to roll out in the fourth quarter.
(Additional reporting by Eric Auchard)