In a move that could apply pressure on Google and Yahoo in the online ad world, AOL has inked a deal to acquire cross-screen advertising startup Adap.tv for $405 million -- $322 million in cash and $83 million AOL common stock.
AOL said the deal will enable it to create a “unified” management platform/video stack for advertisers and publishers for planning, targeting, ad serving and ad measurement. Target markets for the combo include publishers and advertisers of premium original productions as well as content aggregation and syndication platforms.
However, Adap.tv will operate independently as part of AOL’s video organization, led by senior vice president, video Ran Harnevo, and will be included as part of an overall platform offered by AOL Networks to its publisher and advertiser customers.
Privately held Adap.tv has grown global revenue over 100% per year in each of the past three years, and, in 2012, supported more than 26,000 global ad campaigns across 9,500 Web sites, AOL said.
The cross-platform advertising market continues to heat up. Online video ad firm YuMe on July 2 filed to raise $65 million via an IPO. Its stock went public today, with the company pricing its offering of 5.1 million shares at $9 each, below its anticipated range. The Wall Street Journal valued YuMe's IPO at $46.1 million.
"AOL is a leader in online video and the combination of AOL and Adap.tv will create the leading video platform in the industry," AOL chairman and CEO Tim Armstrong said, in a statement. "The Adap.tv founders and team are on a mission to make advertising as easy as e-commerce and the two companies together will aggressively pursue that vision.”
“We believe that most TV advertising will soon be traded programmatically on platforms like ours. The combination of AOL and Adap.tv accelerates our vision of efficient and effective TV and video advertising,” added Adap.tv CEO Amir Ashkenazi.
Adapt.tv, founded in 2005, has raised a total of $48.5 million. Its backers include Bessemer Venture Partners, Gemini Israel Funds, Redpoint Ventures and Spark Capital.
AOL expects to close the deal in the third quarter of 2013.
Also on Wednesday, AOL posted second quarter net income of $28.5 million (35 cents per share) on revenues of $541.3 million, up 2% versus the year-ago period.