We just talked with Right Media chief executive Mike Walrath, whose ad marketplace company just got a massive dollar injection from Yahoo. Now we understand why it comes from Yahoo.
We wrote early today (see our wire story) about the investment.
Walrath says the company now has more than two billion ad impressions a day being bought on it. And with Right Media taking “a less than 10 percent cut” as middleman from each transaction, that has to be a fairly healthy income. (The exact fee depends on a number of factors, such as volume being sold, type of inventory, and whether an advertiser is selling according by impressions or click-throughs.)
However, he wouldn’t comment on whether Right Media is making money yet – saying only that he’s focused on making Right Media the biggest exchange. If the company can show it has the most people showing up, he can create a virtuous cycle: Even more advertisers and publishers show up, thinking they can get the best deal there.
That’s where Yahoo comes in. Right Media is the largest such marketplace. (“We’ve built the largest pool of liquidity in an ad exchange,” Walrath says.) The only real competitors are likely to be Microsoft (Ballmer has said he wants Microsoft to be the eBay for advertising) and Google (which has long had wanted to be the biggest ad intermediary), he said. However, Google’s Adsense offers both sides — advertisers and publishers — less transparency. Same for ValueClick and others, he adds.
Right Media has opened up its APIs, so that its platform is open to other developers wanting to integrate their own applications into it. Besides Yahoo, other big players using the service include Fox Interactive and Tribune Co, he said. The company is growing quickly, now having close to 200 employees, more than double the 75 it started out with at the beginning of the year. With Yahoo as a minority owner, we’ll see whether Right Media can help make inroads on Google.
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