By that thinking, a sale for Millennial was a success in and of itself, regardless of its decreasing market value. Wang echoed that thought as well; “It’s a good exit and win-win for Millennial’s investors, who have never seen the gains they expected.”
AOL was also likely attracted to Millennial’s managed media service, which accounts for almost 90% of company revenue. Its services model aligns with AOL’s well-hyped push to become a full-service stack to rival a platform like Google. To do so, AOL will have to provide more services instead of just technology. (AOL’s purchase of Convertro a year ago was a step toward a more consultative relationship with advertisers.)
And as observed by Brian Wieser, senior analyst at Pivotal Research, part of what Millennial brings to AOL isn’t tech or engineering talent, it’s “the publisher relationships that Millennial established over the years.”
Ironically, Millennial’s reliance on managed services and its failed efforts to build out a platform business demonstrate how difficult it is compete with tech stack players like Facebook, Twitter and Google.
It may be that an independent, standalone mobile ad network isn’t a viable space as tech platforms consolidate. Which is why many observers see Millennial’s choice to be a cog in another platform as a wise one.
As Thompson put it, “The dirty little secret in M&A is not all exits are returns on capital.”