Private marketplaces have become all the rage among premium publishers, with Condé Nast  and Hearst  each erecting walled gardens for their inventory within the past year, and soon Yahoo could join the ranks. Yahoo has been talking with Google, Microsoft-backed AppNexus and PubMatic about replacing Yahoo’s Right Media Exchange with a private marketplace that would exclusively contain Yahoo’s owned-and-operated inventory, according to several sources with knowledge of the discussions.
Adweek has also learned that Rubicon Project has signed a nondisclosure agreement regarding Yahoo’s assets but was not able to ascertain whether the company is among those bidding to replace RMX.
All Things D first reported  on the Right Media talks late Friday afternoon. Yahoo and Google each declined to comment. AppNexus and PubMatic did not immediately respond to requests for comment. The only commentary Rubicon offered was regarding its size. The company pointed to the fact that, per a comScore study, its Web platform reached 200 million visitors, or 90.6 percent of the entire U.S. Internet audience in May, making it the second largest display ad tech platform behind Google.
AppNexus is considered a front-runner in the bidding war. While there are questions as to whether AppNexus could afford to purchase RMX outright or need to raise enough funds from investors, a source said one scenario that has been kicked around involves the currently private ad tech firm offering Yahoo equity as part of the deal, which Yahoo could then cash in should AppNexus go public or be acquired. One theory being floated around is that Facebook, itself a new entrant into the real-time bidding world , would be the one to buy AppNexus, theoretically providing a solid return to Yahoo. However, the source said that hasn’t been discussed in a serious way.
A separate source said that AppNexus CEO Brian O’Kelley has been after RMX for a long time, stemming back to O’Kelley’s days as Right Media’s chief technology officer before Yahoo acquired  the firm in 2007. O’Kelley went on to launch AppNexus, considered by many in the industry as RMX 2.0. That left bad blood between O’Kelley and Yahoo, but multiple sources said that most of the Yahoo executives who would be against dealing RMX to O’Kelley have since left the company.
Multiple sources speculated that Yahoo would not want to agree to a deal with Google because of regulatory concerns that could delay the deal, as happened with last year’s acquisition of Admeld . In fact, in 2008 Google pulled ou t of a search deal with Yahoo after regulators started asking too many questions. Currently, Yahoo and Google are also at a standstill because Yahoo wants to own and be able to access its data exclusively, per one source close to the discussions.
Talk that Yahoo is seeking to sell off RMX has swirled for months . Shortly after former CEO Scott Thompson took the helm in January, Yahoo sought out sell-side capabilities for its owned-and-operated inventory, but that process—described as “shotgun” and “not well organized,” by one source—ended in the spring.
Yahoo initiated a second process in April, but the talks—which are being led by interim CEO Ross Levinsohn, svp of strategy and emerging business for Americas Jim Heckman and head of corporate development Marcus Shen, said a source—are in a holding pattern until Yahoo’s board appoints a permanent CEO. However that uncertainty could clear if Yahoo’s board gives Levinsohn the job when it meets on July 11. Both sources with knowledge of the talks said Yahoo is prepared to move quickly on a deal.
It would be hard to understate the significance should Yahoo move forward in transitioning RMX into a private marketplace. One source at an agency trading desk said that he or she sees double-digit billions of impressions per day in RMX—which has a reach of about 700 million users—versus roughly 20 billion daily impressions in all other exchanges combined.