Yahoo Inc. has brought an unprofitable online advertising service called 5 to 1 Holding Corp. for $28 million to increase it's revenue growth.
The deal announced Wednesday to provide yahoo with more tools to place online ads for big companies looking to promote their brands.
About 20 websites work with 5 to 1 to sell their unused advertising spaces. Those efforts haven't been fruitful for 5 to 1, which has been losing money since it's 2008 inception.
Last 5 years 5 to 1 has lost about $9 million on revenue of less than $1 million. The company based in Santa Monica had 19 employees, including five sales representatives, as of March, according to a filling with the securities and exchange commission. The same filling indicated that 5 to 1 need to raise it's revenue to keep it's operating next year.
Yahoo's earnings have risen recently, but it's ad revenue hasn't kept up with the rest of internet. Last year for instance Yahoo's ad revenue has increased by just 1 percent while total ad sales on internet climbed 15 percent.
The financial funk has weighed on Yahoo's stock price, leaving it far below the $33 a share that the company could have gotten had it accepted a takeover offer from Microsoft Corp. three years ago. Yahoo shares felt 4 cents on Wednesday to close at $15.96.
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