Internet giant Yahoo! Inc. has made a strategic investment in Indian online advertising network Tyroo Media Pvt Ltd. by purchasing more than 35 percent stake in the Gurgaon-based firm for an undisclosed sum.

Yahoo India has bought more than 35 but less than 50 percent stake in Tyroo for a significant amount and the tie up would help us cater to our international clients who want to advertise in India, Yahoo! India Managing Director George Zacharias said.

Through this investment, Yahoo would act as a catalyst for the entire ad-network industry in India, which is still in a nascent stage. It would also signify our increasing focus in Indian online advertising networks, Zacharias said.

Tyroo's engineering capabilities and understanding of the online ad marketing would help creating synergies between the two companies, he said, adding that the deal was part of Yahoo's global strategy even as rival Google continues to rule the roost in the sphere of online advertising.

We are the largest online advertising agency in the country with a 25 percent market share. The future of online advertising is very target specific, Tyroo Media's parent company, Smile Interactive Technologies Group CEO Harish Bahl said last week.

The amount raised would be used for increase the number of customers and advertisers and handholding them, for which we will appoint a nationwide sales team. Also, the tie-up would help us in increasing international presence through Yahoo, Bahl added.

The deal, which would give Yahoo access to Tyroo's technological platform, is expected to help the former consolidate its presence in domestic online advertising space and cater to international clients looking to sell their products in India.

Tyroo has a publisher base of more that 1,200 clients, which boasts of names like Microsoft, HSBC, ICICI, Dell and Tata Indicom to name a few.

Yahoo bought 20 percent stake in US-based online advertising company Right Media in October last year and the remaining 80 percent in April this year for $680 million.

Yahoo's decision to invest comes a day after it reported that global profit dropped by 2.3 percent at the end of the second quarter, the same day chief executive Terry Semel was replaced by founder Jerry Yang.

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