Yahoo's $300 million buyout of BlueLithium comes in the middle of CEO Jerry Yang's 100-day strategic planning period, right after the management reorganisation by president Sue Decker and prior to government clearance of Google's deal to buy DoubleClick.

By integrating BlueLithium's targeting and analytics technology, Yahoo will prop its own capability to serve behavioural and contextual ads on its Publisher Network and improve the Smart Ads service.

The benefits go way beyond behavioural targeting, according to Todd Teresi, senior vice president of the Yahoo Publisher Network. BlueLithium will be the foundation for Yahoo to step into the performance-based online ad space, with the ad network's sales teams providing insight into the needs and habits of direct marketers. Additionally, the purchase diversifies Yahoo's inventory options, since BlueLithium will help to balance longer-term strategic partnerships such as with Comcast and McClatchy, through spot buys and short-term ad bundles, according to a MediaPost article.

Teresi also refuted the prevailing opinions about Yahoo's indecisiveness.

“We have methodically identified where we need to move and move quickly. The strong, off-network deals with companies like eBay, Comcast, and the newspaper consortium were the first steps, acquiring Right Media was the second step, and now increasing direct marketing and performance expertise with BlueLithium is the third,” he is quoted as saying in a MediaPost article.

An industry source said Wednesday that the move is not surprising. BlueLithium's size and brand equity makes it an attractive buy, and the feeding frenzy that began this spring (with WPP, AOL, Google and Microsoft all acquiring ad networks) is bound to continue.

"Yahoo bought two, AOL bought two. The category has shown it's got a lot of value, and I'm pretty sure we'll see at least two more (acquisitions) before the end of the year," according to Mike Cassidy, CEO of Undertone Networks. "They can double BlueLithium's business in a few years, and it complements the Right Media purchase, which was valuable, but not a full solution."

Cassidy also points out that Yahoo's move was to avoid the ad network grasped by other competitors. "They realized that if they didn't buy BlueLithium, a potential competitor, a vendor or even one of their customers would make that acquisition. And while $300 million is a rich purchase price for the size of the company, it's still pretty cheap for Yahoo," he said.