Yahoo will indeed acquire BrightRoll, a video ad network turned platform company, as TechCrunch first reported in October. (See the release).
The transaction, priced at $640 million, fires up Yahoo's ad tech strategy after a dry spell when the company's M&A was focused primarily on consumer-facing mobile platforms. It also provides a partial answer to those wondering how Yahoo would spend the $6 billion windfall from the Alibaba's IPO.
“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,” said Marissa Mayer, Yahoo CEO. "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. The combination builds positive momentum for Yahoo’s broader display advertising business in 2015.”
In announcing the transaction, Yahoo noted BrightRoll is on a 2014 revenue run rate of $100 million. The company claims to serve 87 of the largest US advertisers, 15 top agencies, 18 of the top 20 ad networks, half of the top 50 publishers and 350 video platforms. BrightRoll has been profitable since 2010, according to CEO Tod Sacerdoti.
BrightRoll, founded in 2006, is one of the last remaining “independent” video ads platforms serving both the buy and sell sides, recently bringing on Google’s head of platform sales strategy Bruce Falck as chief operating officer in July.
Since then, the company has been subject to debate whether it would IPO or if one of the big platform companies – Google, Adobe or, of course, Yahoo – would swoop in. But Yahoo seemed like the most logical acquirer, considering BrightRoll always intended “to build an alternative stack to Google” as Sacerdoti told AdExchanger in a July 2014 interview.
Meanwhile, Yahoo had struggled with its video offering. It failed to acquire DailyMotion and its rumored buy-out of online video service News Distribution Network never happened.