Synacor Acquires Technorati For $3 Million To Expand Its Ad Business

Synacor-TechnoratiThe wave of ad tech consolidation continues with Tuesday’s announcement that Synacor will purchase publisher tech vendor Technorati.

The purchase price won’t be revealed until Synacor, a publicly traded company, files its 8-K to the SEC. [Update: Synacor paid $3 million cash.] Technorati posted $7 million in revenue last year, mostly from its aging ad network business and not its newer SaaS business, but Synacor expects the acquisition to help grow its advertising revenue this year.

“We have doubled advertising monetization over the past year and a half, and the next question was about how to expand our reach,” said Synacor CEO Himesh Bhise.

Synacor operates a variety of SaaS and advertising businesses. It creates portals for hardware and network companies such as CenturyLink or Toshiba, including TV Everywhere and OTT platforms. It then places ads on those portals, allowing those companies to share in the ad revenue. Synacor also places ads on its email portal, Zimbra, which many companies use as a white-label solution.

Advertising accounted for 45% of Synacor’s business in the third quarter of 2015, a 17% increase year over year. Buying Technorati will continue that growth, giving Synacor access to Technorati’s 1,000 publisher customers, which have a collective unique user base of 100 million, according to Synacor.

Synacor, experienced in SaaS sales, will apply that expertise to boost Technorati’s SmartWrapper header bidding solution and Contango yield monetization tool. Synacor is also testing those products for use on the existing portals it manages.

SmartWrapper in particular will help expand programmatic monetization for Synacor-managed properties. It sells advertising through a direct sales force, ad networks and, most recently, programmatically. SmartWrapper will bring programmatic revenues up further.

Since portal companies often have logged-in users, there’s an opportunity for Synacor to develop a deterministic user base and solve for cross-device identity. Synacor offers Cloud ID, a SaaS product, that allows its network and hardware customers to offer single sign-on and authentication across devices.

Calling Cloud ID an “important asset” of the company, Bhise said, “We don’t use it in our DMP or ad products today, but as we fast forward to the future and think about what makes advertising valuable to advertisers,” that includes things like audience targeting and cross-device identity.

Synacor will retain Technorati’s team of a dozen employees and will formally open an office in the San Francisco Bay Area, where Technorati is headquartered.

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