Microsoft acquires Israeli ad startup

February 27, 2008, 9:05 PM UTC

By Michal Lev-Ram

Yahoo may be playing hard to get, but that hasn’t stopped Microsoft from forging ahead with its online ad strategy.

On Wednesday Microsoft announced it is buying YaData, an Israeli startup that has makes behavioral targeting tools for marketers and whose founding team consists of data mining experts from the Israeli Defense Forces.

In a statement detailing the acquisition, Microsoft (MSFT) said the smaller company will enable it to “provide its advertisers with richer targeting capabilities so they can connect with their audience in more efficient and engaging ways, at the same time providing its customers more relevant and focused ads.”

The release also said that the YaData team will join Microsoft’s R&D center in Herzliya, Israel. Terms of the deal weren’t disclosed, but Israeli business newspaper Globes is reporting that Microsoft is paying between $20 million and $30 million for the small company.

That’s nowhere near the $44.6 billion hostile bid the company has made for Yahoo (YHOO).

It appears buying YaData was a much easier process.

Microsoft says the YaData acquisition will help it provide “better ROI for advertisers, higher yield for publishers and more relevant advertising for consumers through advanced targeting and optimization.”

Also Wednesday, the European Commission fined the software giant a record $1.3 billion for “failure to comply with anti-trust decision.”