Yahoo ads close in on visitors' locale

Yahoo on Wednesday inked a deal with Akamai Technologies to send consumers specific online advertisements based on where they live or work.

The portal giant plans to incorporate Akamai's geographic targeting technology, called EdgeScape, to pinpoint a person's location by city, state and country. This type of mapping allows Yahoo to serve ads or other information that may be more targeted to the visitor.

The deal expands a two-year relationship between Akamai and Yahoo, which relies on the delivery service's technology to enhance Web site performance. Financial terms of the deal were not disclosed.

The move comes as Yahoo struggles against using the same technology to help ensure visitors cannot gain access to content that is banned in their country. Last year, a French court ruled that Yahoo must completely block French citizens' access to online auctions of Nazi items on its U.S.-based site or face fines of $14,000 per day.

Geographic tracking techniques figure strongly in the case because they can help determine a visitor's origin--the first step in being able to block viewers from certain material. But Akamai's technology does not find banned material or stop people from viewing it, meaning a second feature would be necessary to comply with the French court's decision. That court ruled that Yahoo must "render impossible access" of banned material to French citizens.

At the time of the ruling, Yahoo also dismissed such technology as unable to provide enough accuracy to determine individuals' whereabouts.

"We argued that...it's not a 100 percent accurate solution for the French court order because we would have to identify (French citizens) with 100 percent accuracy, and that's not possible," said Mary Wirth, senior corporate counsel for Yahoo. Experts in the case determined that the technology could determine a viewer's location with 70 percent accuracy.

"The technology is perfectly appropriate for ad targeting purposes," Wirth said.

Akamai said that its geographic mapping technology is, on average, 98 percent accurate. The holes often lie in the difficulty of tracing customers of Internet service providers that use proprietary servers, such as America Online, which issues an address originating in Virginia, the AOL Time Warner unit's headquarters, rather than the customer's location.

EdgeScape uses IP addresses, numeric codes which route signals across the Internet, to determine a computer's physical location. Through the deal, Yahoo can report to advertisers on the effectiveness of ad campaigns and on demographic patterns that can help improve marketing efforts.

The EdgeScape service will help Yahoo sell advertising on a local level, as well as let national advertisers tailor messages to certain demographics. For example, McDonalds could advertise discounts at a chain of local restaurants to visitors within that area.

Such targeted advertising is designed to increase response from consumers and give marketers more value for their investment. Doing so is crucial to Yahoo and other Internet media companies, which are struggling to bolster ad sales at a time when marketers are reining in spending.

Meanwhile, in response to the French court order and to public outcry, Yahoo removed Nazi items from its entire system. But it also asked a federal court in San Jose, Calif., to declare French laws unenforceable in the United States. A ruling for Yahoo may set a precedent that would prevent other countries from imposing restrictions on U.S.-based Internet companies.

The company won a preliminary victory in the case earlier this month when a federal judge denied a request by French human rights groups to toss out the suit.