AOL announced Wednesday that it is buying Adap.tv, a video programming company, for $405 million.
Tim Armstrong, CEO of the online media giant, said the acquisition will help the company improve its ability to integrate advertising with video content. He called it "the most important growth segment in our industry."
The deal comes in amid a flurry of media deals that show digital content's evolution in a rapidly changing media landscape.
"Two trends are prevalent in the video space right now – the movement from linear television to online video and the shift from manual transactions to programmatic media buying," Armstrong said in a statement. "Adap.tv is positioned squarely in front of the huge opportunity these trends are presenting."
Shares of AOL rose 51 cents, or 1.4%, to close at $36.69 Wednesday.
Based in San Mateo, Calif., Adap.tv specializes in digital video advertising, a sector that's expected to surge in growth this year. According to eMarketer, spending in 2013 is expected to reach $4.1 billion, up 41% from the previous year.
Programmatic advertising, a more sophisticated form of advertising targeted to a specific audience, has been especially popular, growing 72% in 2013.
"It's a technology that has been adopted quickly because it enables advertisers to reach consumers on a much more targeted basis than display advertising," says Clark Fredericksen, vice president of eMarketer.
Meanwhile, the company posted second-quarter results that bested Wall Street estimates on revenue and earning, and raised guidance for full-year results.
AOL's
second-quarter profit fell 97% to $28.5 million, or 35 cents a share,
from $970.8 million, or $10.17 a share, a year earlier. The company
attributes the change to its $1 billion deal to sell and license patents to Microsoft.
Excluding the one-time event, AOL said net income and per-share earnings grew "significantly," according to its earnings statement.
Revenue edged up 2% to $541.3 million, compared to $531.1 million a year earlier.
SOURCE : http://www.usatoday.com/story/money/business/2013/08/07/aol-buying-adaptv-405-million-dollars/2626797/
Tim Armstrong, CEO of the online media giant, said the acquisition will help the company improve its ability to integrate advertising with video content. He called it "the most important growth segment in our industry."
The deal comes in amid a flurry of media deals that show digital content's evolution in a rapidly changing media landscape.
"Two trends are prevalent in the video space right now – the movement from linear television to online video and the shift from manual transactions to programmatic media buying," Armstrong said in a statement. "Adap.tv is positioned squarely in front of the huge opportunity these trends are presenting."
Shares of AOL rose 51 cents, or 1.4%, to close at $36.69 Wednesday.
Based in San Mateo, Calif., Adap.tv specializes in digital video advertising, a sector that's expected to surge in growth this year. According to eMarketer, spending in 2013 is expected to reach $4.1 billion, up 41% from the previous year.
Programmatic advertising, a more sophisticated form of advertising targeted to a specific audience, has been especially popular, growing 72% in 2013.
"It's a technology that has been adopted quickly because it enables advertisers to reach consumers on a much more targeted basis than display advertising," says Clark Fredericksen, vice president of eMarketer.
Meanwhile, the company posted second-quarter results that bested Wall Street estimates on revenue and earning, and raised guidance for full-year results.
Excluding the one-time event, AOL said net income and per-share earnings grew "significantly," according to its earnings statement.
Revenue edged up 2% to $541.3 million, compared to $531.1 million a year earlier.
SOURCE : http://www.usatoday.com/story/money/business/2013/08/07/aol-buying-adaptv-405-million-dollars/2626797/
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