American media company AOL, which develops and invests in various brands and websites, will pay $405 million to purchase Adapt.tv video platform that helps companies buy and sell electronic advertisements that are displayed in the online video clips. This is the largest investment since AOL’s acquisition in 2011 of The Huffington Post online publication, according to Thomson Reuters. AOL’s previous purchase was the video syndicator 4Min in 2010.
Adapt.tv is a platform that mediates buying and selling video advertising online. The company with the same name was founded in the U.S. in 2007. The transaction includes approximately $322 million in cash and $83 million in AOL stock. Adapt.tv will operate independently as part of the AOL Video Division led by Ran Harnevo, reads the AOL statement.
By acquiring Adapt.tv, the U.S. media company will offer a wider range of video services for advertising agencies and publishers, from production to content aggregation and video programming platform, writes Bloomberg. Last year Adapt.tv claimed over 26,000 global advertising campaigns, which were distributed on 9,500 websites.
“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,” said Tim Armstrong, AOL chairman and CEO.
Shares of AOL (NYSE:AOL) were up 5.5 percent at the opening of the New York stock exchange on Wednesday, reaching a high of $38.22, but closed down to $36.69 at the end of trading session today. AOL’s second quarter profit was down 97 percent to $28.5 million compared to $970 million in Q2 2012. The drop is mostly due to the $1 billion deal to sell and license patents to Microsoft.
Video advertising market is expected to surge 41 percent this year from 2012 to a high of $4.1 billion.
” 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,” said Clark Fredericksen, eMarketer vice-president.
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