In a deal clearly aimed at driving revenue growth for its current crop of service provider partners while also expanding into new markets, Synacor said it is acquiring digital advertising technology company Technorati.
Synacor, a company that makes Web portals, TV Everywhere authentication systems and provides email services, currently represents about 20 million “uniques” through partnerships with MVPDs and ISPs such as Mediacom Communications, CenturyLink, WideOpenWest, and Suddenlink Communications. Technorati adds to that another 100 million uniques via its network of about 1,000 publishers.
“Advertising is an important growth engine for the company,” Synacor CEO Himesh Bhise said, noting that the acquisition of Technorati gives it “tremendous reach across the U.S.” and help its existing operator partners further monetize their ad inventory.
Advertising represented 45% of Synacor’s revenues in Q3 2015, up 17% year-over-year (Synacor is scheduled to announce Q4 results on March 16).
Synacor didn't announce the financial terms of the acquisition, but expects it to be accretive to its 2016 earnings. Privately held Technorati generated about $7 million in revenue in 2015, according to Synacor.
Update: Per an 8K filed today, Synacor will acquire “substantially all of the assets” of Technorati for $3 million in cash.
Bhise said San Francisco-based Technorati has been focused on developing an ad software product focused on header bidding, a new development that allows website publishers to net the highest price for ad inventory using real-time auctions. That technology, called SmartWrapper, pings ad networks, identifies the highest price, while providing the tools required to manage the complexity. SmartWrapper is part of Technorati’s Contango ad-tech platform.
Synacor, which has already been testing the vendor’s header bidding technology, believes Technorati’s products will enable it to build ad scale and provide targeting across desktop and mobile platforms, while also enabling it to expand its overall ad inventory.
Technorati will also give Synacor a programmatic ad platform to add to its software-as-a-service-based portfolio, which includes Zimbra (email), cloud ID authentication and multiscreen video.
About ten Technorati employees will be joining Synacor and remain based in the San Francisco area, where Buffalo, N.Y,-based Synacor already has a presence.
“For Technorati, becoming part of Synacor is a logical next step to grow our ad network and our digital advertising solution, SmartWrapper,” Technorati CEO Shani Higgins said in a statement. “All of us at Technorati are excited to be joining Synacor and bringing our programmatic advertising platforms to a much broader audience of customers and partners.