Yahoo on Wednesday inked a deal with Akamai Technologies to send consumers specific online advertisements based on where they live or work.
The portal giant plans to incorporate Akamai's geographic targeting technology, called EdgeScape, to pinpoint a person's location by city, state and country. This type of mapping allows Yahoo to serve ads or other information that may be more targeted to the visitor.
The deal expands a two-year relationship between Akamai and Yahoo, which
relies on the delivery service's technology to enhance Web site
performance. Financial terms of the deal were not disclosed.
The move comes as Yahoo struggles against using the same technology to help
ensure visitors cannot gain access to content that is banned in their
country. Last year, a French court ruled that Yahoo must completely
block French citizens' access to online auctions of Nazi items on its
U.S.-based site or face fines of $14,000 per day.
Geographic tracking techniques figure strongly in the case because they can
help determine a visitor's origin--the first step in being able to block
viewers from certain material. But Akamai's technology does not find banned
material or stop people from viewing it, meaning a second feature would be
necessary to comply with the French court's decision. That court ruled that
Yahoo must "render impossible access" of banned material to French citizens.
At the time of the ruling, Yahoo also dismissed such technology as unable
to provide enough accuracy to determine individuals' whereabouts.
"We argued that...it's not a 100 percent accurate solution for the French
court order because we would have to identify (French citizens) with 100
percent accuracy, and that's not possible," said Mary Wirth, senior
corporate counsel for Yahoo. Experts in the case determined that the
technology could determine a viewer's location with 70 percent accuracy.
"The technology is perfectly appropriate for ad targeting
purposes," Wirth said.
Akamai said that its geographic mapping technology is, on average, 98 percent
accurate. The holes often lie in the difficulty of tracing customers
of Internet service providers that use proprietary servers, such as America
Online, which issues an address originating in Virginia, the AOL Time
Warner unit's headquarters, rather than the customer's location.
EdgeScape uses IP addresses, numeric codes which
route signals across the Internet, to determine a computer's physical
location. Through the deal, Yahoo can report to advertisers on the
effectiveness of ad campaigns and on demographic patterns that can help
improve marketing efforts.
The EdgeScape service will help Yahoo sell advertising on a local level, as
well as let national advertisers tailor messages to certain demographics.
For example, McDonalds could advertise discounts at a chain of local
restaurants to visitors within that area.
Such targeted advertising is designed to increase response from consumers
and give marketers more value for their investment. Doing so is crucial to
Yahoo and other Internet media companies, which are struggling to bolster
ad sales at a time when marketers are reining in spending.
Meanwhile, in response to the French court order and to public outcry,
Yahoo removed Nazi items from its entire system. But it also asked a
federal court in San Jose, Calif., to declare French laws unenforceable in
the United States. A ruling for Yahoo may set a precedent that would
prevent other countries from imposing restrictions on U.S.-based
The company won a preliminary
victory in the case earlier this month when a federal judge denied a
request by French human rights groups to toss out the suit.