Yahoo buys BrightRoll

"Acquiring BrightRoll will dramatically strengthen Yahoo's video advertising platform, making it the largest in the US," Yahoo Chief Executive Marissa Mayer said.

San Francisco-based BrightRoll enables advertisers to place targeted video ads on desktop computers, smartphones, tablets and Internet-linked televisions.

Yahoo is under pressure to beef up its share of the global ad market, which currently stands at just 2.4 percent, down from 3.9 percent in 2011, according to research firm eMarketer. By comparsion, Facebook's share has climbed from 3.6 percent in 2011 to a projected 8 percent this year while Google has held on to a 32 percent share.

Mayer, who became chief in 2012, has been trying to transform Yahoo from a faded search engine to a venue for premier, personalized digital content, taking into account the increasing dominance of mobile devices.

Flirting with AOL?

In September, activist shareholder Starboard Value had issued a challenge to Mayer in a letter critical of the more than 30 acquisitions she has made for a total of about $1.6 billion.

It argued that the acquisitions made little financial sense and urged Mayer to consider buying rival AOL, to save money and bring in more ad revenue.

According to the Reuters news agency, two major Yahoo shareholders have approached AOL Chief Executive Tim Armstrong directly to explore the possibility of a merger. Reuters did not name the two investors.

Yahoo has not given any indication so far that it is considering a tie-up with AOL.

Yahoo's recent sale of Alibaba stock has netted the company $6.3 billion, half of which it has promised to distribute to shareholders. The remainder has been set aside for acquisitions.

ng/sgb (Reuters, AP, AFP)