What: Yahoo has confirmed the acquisition of company BrightRoll for US $640 million in cash .
Why it matters: This a major move after a not so sucsessful acquition of Tumblr last year.Specially, when online video advertising is growing at a brisk pace and expected to reach US $6 billion in 2014.The deal could turn Yahoo’s video ad platform “the largest in the U.S.” Yahoo’s Brightroll acquisition follows AOL’s acquisition of Adap.TV, Facebook’s acquisition of LiveRail, as well other acquisitions by Google to gain clout in the online video serving and online video advertising markets.
Yahoo has confirmed it will acquire video ad company BrightRoll for US $640 million in cash, turning the company into a big player in the growing online video market. Last month we already reported that the deal was in the making.
The acquisition was announced on Tuesday and is Yahoo CEO Marissa Mayer most expensive acquisitions after it acquired Tumblr for US$1 billion last year. Unlike Tumblr, Brightroll is already profitable with US $100 million in revenues and 2 billion ad requests each day.
The deal will combine Yahoo’s premium ad inventory and data with BrightRoll’s programmatic video ad marketplace. BrightRoll will continue working with non-Yahoo publishers and the 400-plus BrightRoll team will be joining Yahoo, Mashable reports.
According to Marissa Mayer, video is one of the company’s key growth areas (along with mobile, social and native advertising), and this acquisition will make Yahoo’s video ad platform “the largest in the U.S.”
Video is one of the company’s key growth areas , and this acquisition will make Yahoo’s video ad platform “the largest in the U.S”
“Video, along with mobile, social, and native, is driving a surge in digital advertising. Here at Yahoo, video is one of the largest growth opportunities, and BrightRoll is a terrific, strategic and financially compelling fit for our video advertising business,” Mayer said in a press release.
Hogging the video business
The video category is one of the fastest-growing segments of online advertising. eMarketer expects nearly US $6 billion to be spent in the U.S. in 2014 and that amount to be doubled by 2016. .
The move, could be seen as Brightroll’s response to AOL’s purchase of Adap.tv, a similar company that focuses on digital video advertising.
BrightRoll was founded in 2006 by Tod Sacerdoti who is still its CEO. The company has raised US $40 million in funding from investors including Adams Street Partners, Scale Venture Partners, Comerica Bank, True Ventures, Trident Capital, KPG Ventures, Michael Tanne, Fabrice Grinda, Auren Hoffman and Jeff Clavier, according to CrunchBase.
Mayer has been criticized for spending over US$1 billion in the Tumblr acquisition last year. Some observers say the deal is not paying off. But Meyer expects Tumblr to become a U $100 million business for Yahoo next year.