The beleagured Internet behemoth has completed the acquisition of Masschusetts based Maven Networks which sells solutions that allows websites to "play, distribute and syndicate broadband video", according to the International Herald Tribune.
Maven Networks already work with a number of media companies, including News Corp.'s Fox News, Sony Pictures and CBS Corp.'s CBS Sports.
Maven will help Yahoo expand its offerings in the video advertising market which has been long dominated by Google owned Youtube and which is worth only $775 million, although this is set to grow significantly to $4.3 billion in 2011 according to Emarketer Inc, a research Firm.
The New York Times understands that Yahoo will try to position itself as a "seller and distributor" of online ads from simple text ads to more complex rich media, video adverts.
Maven's technology allows small adverts to be integrated into the content without having being overly intrusive; a more successful approach than preroll ads which have been adopted by traditional TV programmes.
Also unlike Google, Maven works primarily with recognised media companies, avoiding the controversies associated with user generated content.