Yahoo Inc in a move to strengthen its service to web advertisers has acquired BlueLithium for US$300m. BlueLithium provides technology that matches adverts to users’ interests.

This purchase is one fo the strategic moves spearheaded by Yahoo new CEO, Jerry Yang, to match its rivals Microsoft and Google. Prior to this, Yahoo has acquired online advertising exchange Right Media for US$700m.

The top three web search providers has been strengthening their advertising funtions  by a series of acquisitions. Microsoft has acquired aQuantive for US$6bn and Google has acquired DoubleClick for US$3.1bn.

Let’s see how the online advertising is going to play out in 2008 with these acquistions.

Yahoo Inc will introduce a new software on Yahoo mail that allows its e-mail users to send text messages to someone’s cell phone. With this enhancement, Yahoo has integrated text messages, instant messages and e-mail into a single website.

Currently, this feature is only available for users in US, India, Canada and Philippines.

Competition among its e-mail rivals such as Google Gmail and Microsoft Hotmail is pushing these companies to provide more features to their users. Recently, Yahoo announce unlimited storage space for it users.