Yahoo: The Best Defense Is a Strong Offensive Play

Yahoo’s (YHOO) strength today is primarily in its display advertising, and secondarily in its search advertising and Asia investments.

Investors however have likely overlooked a potentially very significant Yahoo press release, due to headline news coverage of the Microsoft (MSFT) potential takeover of all or part of Yahoo assets. On July 10th, Yahoo announced its entry into the In-Game Advertising [IGA] market, by partnering with Double Fusion and NeoEdge. By leveraging Yahoo Games and its relationship with Activision Blizzard (ATVI) though Yahoo’s Board of Directors, Yahoo could potentially turn its IGA initiative into a strong offensive play, putting Google’s (GOOG) IGA initiative, with the acquisition of AdScape last year, at a significant disadvantage.

Disclosure: Long YHOO.