Yahoo! Inc., the U.S. Web portal that is exploring strategic options, agreed to buy Interclick Inc. for $270 million in cash to help advertisers reach online users with more targeted messages.
Interclick stockholders will get $9 a share, Yahoo said today in a statement. That’s 22 percent more than the closing price yesterday of New York-based Interclick, which assists companies in marketing to customers based on their online behavior. The tender offer is expected to close by early 2012.
Yahoo may use the purchase to revive sales of display advertising, such as banner ads, which stalled last quarter. The company is seeking a chief executive officer after firing Carol Bartz in September, and has embarked on a strategy review as it grapples with competition from Google Inc. and Facebook Inc.
“The company needs to improve their display advertising business; it’s not a major acquisition for Yahoo,” Colin Gillis, an analyst at BGC Partners who recommends holding Yahoo’s shares, said in an interview. “The deal is not going to change whether buyers are going to come or not.”
Yahoo is leaning toward selling Asian assets and redistributing the proceeds to shareholders, rather than selling itself to a group of buyers, people familiar with the situation said last week. No decision has been made yet, the people said at the time. Yahoo may also seek buyers for a minority stake or for the entire company after finding acquirers for the Asian businesses, the people said.
Yahoo Shares Fall
Yahoo, based in Sunnyvale, California fell 4.5 percent to $14.93 at the close in New York. Interclick rose 21 percent to $8.94.
During the third quarter, Yahoo’s display ad revenue, excluding sales passed to partners, was $449 million, little changed from $448 million a year earlier. Display sales rose 4.9 percent in the second quarter.
The company’s share of display ads in the U.S. will be 13.1 percent this year, down from 14.4 percent last year, estimates EMarketer Inc. Facebook’s share will climb to 16.3 percent, up from 12.2 percent, making it the No. 1 provider.
“Interclick’s behavioral targeting technology could help Yahoo to grow its display advertising revenue faster,” said Kerry Rice, an analyst at Needham & Co. in San Francisco who recommends buying Interclick shares. “Yahoo could give Interclick more resources to expand into areas like mobile and video advertising.”