Yahoo founder sees China ripe for online ad exchange

Yahoo co-founder Jerry Yang said on Wednesday that China is fertile ground for an online advertising exchange akin to the one the US Internet titan is buying.

The comment was among insights Yang shared with more than 1,000 Chinese and US technology entrepreneurs gathered in the California city of Santa Clara to discuss opportunities and challenges presented by the meteoric growth of China's economy.

US Internet giant Yahoo co-founder Jerry Yang during a presentation in a Tokyo hotel, March 2006. Yang said on Wednesday that China is fertile ground for an online advertising exchange akin to the one the US Internet titan is buying.[AFP]

"I'm going to call Jack Ma up with this idea of an exchange for advertisers and ad buyers," Yang said, referring to the chairman of Chinese Internet company Alibaba.com. "The potential is huge."

In August 2005, Yahoo invested one billion dollars for a 40 percent stake in Alibaba, which also agreed to run the Chinese operations of the US Internet giant.

Yang said that as it neared its second anniversary, the Yahoo-Alibaba partnership has "some catching up to do" in the online search and portal business in China but that he expected a turnaround in a few years.

"On the whole, we feel our move to partner with Alibaba so far looks like it's the right strategy," Yang said. "It is too early to tell whether we are successful or not."

"The best strategy still seems to be Chinese and US companies sharing best practices ¡ª we all benefit."

Yahoo is buying New York City-based online advertising exchange Right Media in a move to counter Google's move to acquire the DoubleClick Internet ad-targeting firm.

The California online search titan, which owns 20 percent of Right Media, said it will acquire the remaining 80 percent of the company for 680 million dollars (500 million euros) in stock and cash.

The ad exchange serves as a place where advertisers can easily "hook-up" with websites or online services that cater to desired customer demographics.

While announcing on April 13 that it was buying New York-based DoubleClick for 3.1 billion dollars, Google revealed plans for the Internet ad tracking and targeting firm to create an open exchange similar to Right Media.