AOL has just made a big purchase. It is to acquire Adap.tv for massive $405 million out of which $322 million is paid in cash and approximately $83 million in AOL common stock. This step came about due to the efforts of Tim Armstrong, who took over AOL half a decade ago.
It’s been quite some time since AOL bought a company. But, now the web video advertising company, known as Adap.tv is undergoing a merger with AOL. $405 million is the price and it is just right for AOL’s Tim Armstrong. Two years ago, AOL bought the Huffington Post for $315 million. This time around however the purchase differs in its type.
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Adap.tv is basically a service that employs software to link video ad purchasers and sellers. AOL has been taking a very keen interest in the video revolution for some time. It acquired 5Min in 2010 for this purpose alone. What Armstrong really wants is to build AOL to rival Google’s DoubleClick facility. A deal between AOL and Adap.tv was already in the making.
Tim Armstrong, Chairman and Chief Executive Officer of AOL, said, "AOL is a leader in online video and the combination of AOL and Adap.tv will create the leading video platform in the industry. 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. 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. Adap.tv is positioned squarely in front of the huge opportunity these trends are presenting.”
AOL wants to seriously compete with Yahoo too. With Adap.tv on its side it may do just that. Adap.tv is at the leading edge of this form of technology. Also Adap.tv has raised a net total of $48.6 million in funds. This acquisition will pump fresh blood into the veins of AOL. It had seen better days. And now that this refreshing infusion has entered its system it would regain its lost glory. The whole thing had to do with advertising which has in recent times gone the viral route. Adap.tv will bring the highest growth sector to AOL thereby lending it a boost in matters of progressive development.
Adap.tv CEO, Amir Ashkenazi, states about the deal, “At Adap.tv, we are focused on building the most important business within the most important category in digital advertising,” said . “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.”