Yahoo!, in a bid to boost its marketing power, is set to sell the majority of the display advertising for social networking site Bebo, the Associated Press (AP) reports.The deal, which is expected to be announced today, marks the first time that the search engine has agreed to supply advertising to a social networking site.
According to the AP, such sites have represented a major challenge to Yahoo! recently, as their popularity among users has led to advertisers spending more money on them than on older, "all-purpose" sites like Yahoo!.
Indeed, social networking sites could represent the next "market boom", according to a recent study published by Juniper Research.
Yahoo! rival Google has already signed an advertising deal with MySpace, while Microsoft has entered a similar agreement with Facebook.
Combined, Yahoo! and Bebo are anticipated to reach approximately three-quarters of the UK's online audience, but the companies have not revealed how advertising revenue will be divided under the deal.
Managing director of Yahoo! Europe Toby Coppel commented: "This exclusive partnership is the next step of our ongoing strategy to build the largest and most effective online advertising network."
Yahoo! has been struggling recently with falling profits and company chairman Jerry Yang is working on a number of initiatives to improve its performance.
The search engine recently purchased internet marketing firm BlueLithium for $300 million in a further attempt to strengthen its advertising credentials.
