Yahoo buys ad start-up company Luminate wants to revive advertising business

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Yahoo will get more than $8 billion trillion in pre-tax income from Alibaba's IPO.

Tencent technology news internet giant Yahoo has acquired the advertising start-up company Luminate to revive its former brilliant advertising business.

Earlier this week, Luminate services were closed and the terms of purchase were not disclosed. Yahoo has confirmed the acquisition.

Founded in 2008 in Mountain View, California, the company is an ad network with more than 180 million users and over 6 billion monthly visits. The service allows marketers to overlay product ads, display ads, and text ads on network photos.

"We are delighted to join Yahoo to continue to bring the innovative experience to the wider audience." James Everingham, CEO of Luminate Company, said in a post.

The acquisition is the latest in more than 40 acquisitions by Marissa Mayer, Yahoo's CEO, since the helm of Yahoo two years ago. The company has been trying to regain the dynamism of its advertising business. Yahoo's advertising business has slipped in recent years as younger rivals such as Facebook are increasingly dominant in online advertising. In the last quarter, one of the company's key economic pillars showed ad revenue, which has fallen 7% per cent year-on-year.

In February this year, the company launched the Gemini local advertising platform, which is dedicated to combining content with editorial content, rather than being completely separate from editorial content as traditional ads do.

At the same time, Yahoo's Chinese power trader giant Alibaba announced in Friday that it is ready to set the upcoming IPO price between 60-66 dollars. Yahoo now holds 22.6% per cent of Alibaba and will continue to hold 16.3% per cent after Alibaba's listing.

Alibaba may raise 24.3 billion of dollars in the IPO process. That means Yahoo will get more than 8 billion dollars in pre-tax income. Yahoo has pledged to use half of the proceeds from the IPO to repay shareholders, and the rest will be used to support Ms. Mayer's more acquisitions in the future. (Le study)