Yahoo acquires BrightRoll for $640m

Pippa Chambers
By Pippa Chambers | 12 November 2014

Yahoo is set to “dramatically strengthen” its video advertising platform by acquiring global programmatic video ad company BrightRoll for $640 million in cash.

Yahoo has just announced a definitive agreement to buy the 2004-founded business and the transaction will combine Yahoo's desktop and mobile video advertising inventory with BrightRoll's programmatic video platform.

It seems every major online ad tech player wants a video platform in order to be a player in the digital video branding space: AOL acquired for US$405 million last year and Facebook snapped up LiveRail in July for a figure between US$400 to US$500m.

Yahoo said with online video advertising growing increasingly fragmented across thousands, if not millions, of sites and mobile apps, advertisers are continually seeking ways to buy online video advertising at scale in fewer, simpler transactions.

Yahoo CEO Marissa Mayer said: “Video is display 2.0. It’s what brand advertisers love. It’s a format that elegantly and easily transitions from broadcast television to PC to mobile and even to wearables. This is why video is a key part of our strategy.”

She said acquiring BrightRoll will “dramatically strengthen” Yahoo’s video advertising platform, making it the largest in the US.”

Mayer said it’s one of Yahoo's four strategic pillars: search, communications, digital magazines and video and is also one of its “growth businesses”, alongside mobile, social and native.

Speaking to AdNews, market analyst and MD of strategic insights and advisory company Telsyte, Foad Fadaghi, said that while Yahoo may be late to the party in terms of making acquisitions in this space - compared to likes of Google and Amazon - it is by no means behind in its activity within video and programmatic.

“This is certainly a bit of a boon for Yahoo as it had been a bit behind the eight ball, but this acquisition will now bring it in line with other players,” Sydney-based Fadaghi said.

“Display is an important part of Yahoo's strategy; it's critical for them so by having the ability to see even more video ads it will definitely attract new value.”

While it's not yet clear how this acquisition will trickle down through and impact the Australian market, it is thought it will bring unique advantages for Yahoo7.

BrightRoll CEO and founder, Tod Sacerdoti, said he believes the next step for programmatic video advertising as an industry is to extend and standardise globally in order to make cross-device buying simple and measurable, and to complement and integrate with TV.

"We are excited to join Yahoo to materially advance efforts in each of these areas. We're still in the early innings as an industry, and together, BrightRoll and Yahoo are committed to the vision of helping grow the entire video advertising ecosystem,” he said.

Mayer added that BrightRoll is a large, growing and profitable business with net revenues expected to exceed $100 million this year.

BrightRoll aggregates publishers together into a unified network utilising programmatic advertising and aggregation to allow real-time buying.

"Video, along with mobile, social, and native, is driving a surge in digital advertising,” Mayer added.

“Here at Yahoo, video is one of the largest growth opportunities, and BrightRoll is a terrific, strategic and financially compelling fit for our video advertising business.

“As with every acquisition, we have been extremely thoughtful about our approach to the video advertising space. This acquisition will accelerate the growth of both companies - we can help BrightRoll scale to even more advertisers globally and they can bring their tremendous platform offering to Yahoo's advertisers.”

BrightRoll will retain its 400-strong team of employees and the acquisition is expected to close in Q1 2015.

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