Yahoo made another pickup in the advertising sector last week, acquiring the in-imaging advertising company Luminate. The advertising company announced the acquisition on its webpage, noting that services would be winding down effective September 3, with any reminding earnings or balances remaining to be returned by the end of September.
Luminate, founded in 2008 as Pixazza, had raised just under $29 million in funding, from investors that included August Capital, Google Ventures, Nokia and Ron Conway among others. Founders who are no longer with the company include Lloyd Tabb, now leading Looker.
"Luminate created an interesting model that was pay-per-performance-based. There's three things at issue here. Image-text ads, full-display ads and product ads. Luminate are really good at this and have a high click-through rate. This really is a smart acquisition," Wang said.
It's unknown what Yahoo plans to do with the crowdsourcing and image detection technology behind Luminate, but it will probably bolster the advertising unit. The company witnessed a decline in display ad revenues in the second quarter, even though it was selling more ads in the process. Search Ad revenues were up, but the technology behind Luminate won't be as effective as it would in display ads the way it currently stands. However, with Yahoo looking to create a "united approach" to advertising, something could be in the works that would distinguish its type of ads from the competition with Luminate's help.