Microsoft Wises Up With YaData Acquisition

The Israeli exit list for 2008 continues to grow. Microsoft (MFST) announced yesterday the acquisition of YaData (literally means “you knew” in Hebrew), a provider of advanced tools for the discovery of unique customer segments. Exact deal terms were undisclosed, but the deal is estimated to be in the $20-$30 million range according to estimates from Globes.

YaData’s technology will add advanced behavioral targeting tools and richer targeting capabilities to Microsoft’s Advertiser and Publisher Solutions group, allowing the software giant to deliver better targeted ads and connect with their advertisers in better, more engaging ways. Logistically, YaData’s technology and team will be folded into Microsoft’s R&D center in Herzliya, Israel.

In the official press release, Moshe Lichtman, President of the Microsoft Israel R&D Center, said:

The purchase of YaData brings the Israeli R&D center into the field of online advertising, which is undoubtedly one of Microsoft’s most strategic fields. This is a great example of how Israeli technology has considerable value that is contributing to our most important areas of development. In recent months, I have become familiar with YaData’s top quality personnel, and I am convinced that their contribution to the Israeli R&D center and to Microsoft globally will be significant.

Amir Peleg, CEO of YaData, added:

YaData fully believes in the potential of behavioral targeting to enhance the value of online advertising for publishers, advertisers and users. Microsoft has the resources to unlock the potential in YaData’s technology and create a truly innovative online advertising solution. We’re excited to see what the future holds.

While improving the ad targeting and ROI of the advertiser, Microsoft also addressed the consumer privacy concerns associated with the acquisition and mentioned that it will “remain committed to providing best-in-class audience segmentation and targeting without using personally identifiable information”.

Headquartered in Tel Aviv in an office of 18 people, YaData was founded in 2005 with seed investment from Oracle (ORCL) and Tnufa, Israel’s grant program. (As first reported by TechCrunch). In January 2007, it raised a series A of $4.4 million led by Giza Venture Capital and Ofer Hi-tech.

According to TheMarker, a few people achieved the Israeli version of the American Dream with this acquisition. The new millionaires are Amir Peleg, Prof. Rann Smorodinsky, formerly the co-founder of Unipier/Cash-U and Dr. Ishai Oren, who is curiously the author of two novels and a screen play. If you can read Hebrew, you’ll enjoy the profiles on the founders in TheMarker’s article.