After facing continuous investor unrest to improve the revenue streams of the company, Yahoo! Inc. (NASDAQ:YHOO) has finally acquired BrightRoll, video advertising platform, for $640 million. This acquisition is aimed at improving the footing of the company in the highly competitive online advertising industry.
The acquisition of BrightRoll is significant in terms of the overall advertising market share of Yahoo, as the process would combine the desktop and mobile advertising resources of Yahoo with the publisher relationships and video platform of BrightRoll. The combined company would form the largest online video advertising platform in the U.S. The revenues of BrightRoll are likely to reach $100 million this year and according to a report from comScore, the advertising platform topped the video advertising chart in U.S. during the year 2014, in terms of customer reach.
Marissa Mayer, CEO of Yahoo! Inc. (NASDAQ:YHOO), said,
“Video, along with mobile, social, and native, is driving a surge in digital advertising. 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.”
Mayer further indicated the long-term strategy of Yahoo to enhance its display ad exposure and added,
“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. The combination builds positive momentum for Yahoo’s broader display advertising business in 2015.”
The acquisition is likely to happen in the first quarter of 2015 and BrightRoll would retain its 400 employees. Tod Sacerdoti, founder and CEO of BrightRoll, said,
“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.”
The shares of Yahoo! Inc. (NASDAQ:YHOO) are currently trading at $49.05 with P/E ratio of 6.45.
This article has been written by Prakash Pandey.