Yahoo! Strikes Deal To Develop I-Marketing Program

Looking to drum up new sources of online advertising revenue, powerhouse portal Yahoo! (Nasdaq: YHOO) announced Monday that it has stuck a deal with Arnold MPG to develop new Internet marketing campaigns for the media buying and planning agency's clients.

As part of what the deal, Arnold MPG has agreed to purchase media and promotional programs on Yahoo's network of properties for its customer roster, which includesVolkswagen, McDonald's, the American Legacy Foundation, Chevron, Fidelity and Royal Caribbean.

Specifically, the agreement calls for the two companies to cultivate programs that include standard media units, broadcast services, special online promotions, and enhanced research and analysis offerings.

Financial terms of the arrangement were not disclosed.

Yahoo! chief advertising sales officer Harris Millard said that the type of commitment made by Arnold MPG "is necessary to support the continued growth and maturity of this marketplace."

Expanding Options

For its part, Arnold MPG said the deal will enable it to bring a valuable slate of online marketing services to its clients.

The Boston, Massachusetts-based company is a division of MPG USA, a US$3.4 billion agency network that is owned by Havas Advertising.

Looking for a Boost

The online advertising industry and the companies which rely on it for much-needed revenue have been particularly hard hit by the economic downturn.

According to Jupiter Media Metrix's AdRelevance unit, the overall decrease in online retail advertising throughout 2001 was most likely triggered by eroding consumer confidence in the midst of a gloomy financial market as well as the deeper economic malaise brought about by September's terrorist attacks.

Industry watchers forecast that online advertising will begin to improve later this year.

Striking Deals

Although its financial balance sheet was closely tied to the fate of the online advertising market in its early days, Yahoo! has aggressively moved to diversify its income-earning potential with deal-making sprees.

Since the turn of the new year alone, the Sunnyvale, California-based heavyweight has announced that it will develop personalized Web portals for the 16 million customers of health care and retirement benefits giant Cigna (NYSE: CI) and complete its acquisition of Internet job board HotJobs (Nasdaq: HOTJ).

On the e-commerce front, the company chalked up gains across its network of sites, repoting an 86 percent increase in online shopping purchases made by its cusotmers in the fourth quarter.

Yahoo! is slated to issue its complete fourth quarter and 2001 results this week.