Their system is similar to Google’s Adsense. Website owners embed code in their site’s web pages. Then ads are served according to the page content.
But Yahoo!’s program, launched in 2005 never got out of beta. Perhaps they felt they were just playing catch up to Google. In any case the competition was too intense, particularly as multitudes of other companies offered revenue opportunities via ad placement through affiliate programs.
I hadn’t invested a lot of time or effort putting Yahoo! ads on my web properties, so I’m an example of Yahoo!’s exact problem — too few website owners used their program. But I imagine some owners did put a lot of time and effort into supporting Yahoo!’s ad system.
To soften the blow Yahoo! is partnering with ad publisher Chitika. This should allow users to wean themselves off Yahoo! without too much pain. Even so, Yahoo! is sure to lose significant loyalty over this move.