AOL Buy Out With Online Advertising Plans

Well-known internet services provider AOL are set to spend big in order to bring a new name onto their portfolio, after agreeing a $405m cash + stock deal to purchase online video advertising specialists for $405m.

adap.tv_logoAiming to help the company further capitalise in the increasingly-lucrative internet video market (as well as potential inroads into the television market), AOL’s acquisition is the biggest since they spun-off from Time Warner in 2009, even outnumbering the high-profile $315m purchase of the Huffington Post in 2011.

The terms of the arrangement will see receive $322m cash and $83m worth of ‘AOL common stock’, whilst being able to retain their ‘independent operation’ under the AOL video banner, with the company being led by Ran Harnevo. Meanwhile, it will be hoped by AOL that’s existing knowledge and income (including ‘software-driven advertising’) is a good starting block to oversee a highly profitable venture in the internet video advertising business.

Current AOL chief executive Tim Armstrong said of the reasoning behind the move as ‘traditional television’ gains an increasing presence online and in prime position for ‘automated ad placements': “ is positioned squarely in front of the huge opportunity these trends are presenting. AOL is a leader in online video and the combination of AOL and will create the leading video platform in the industry. This is about the TV business.”

For a company that recently beat expert predictions when they turned a Q2 profit, assisted by advertising sales increases, will AOL’s fortunes be further enhanced by taking under their wing?

1 Comment

  1. Advertisers Divert Funds From TV To Online
    Advertisers Divert Funds From TV To Online October 24, 2013 at 11:08 am

    […] with digital media website Digiday for the report ‘State of the Video Industry’, the AOL-owned company surveyed 900 advertising agencies, providers, networks, and publishers, with all reporting back on […]

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