Yahoo takes video advertising platform BrightRoll into its fold for $640 million

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Yahoo, on Tuesday, announced that it has acquired San-Francisco-based video advertising platform BrightRoll for $640 million in cash.

Announcing the acquisition, Yahoo CEO Marissa Mayer in a statement said “BrightRoll is a terrific, strategic and financially compelling fit for our video-advertising business.”

“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.”

Founded in 2006 by Tod Sacerdoti, BrightRoll helps to automatically place ads in videos displayed across web, mobile and connected devices. The start-up currently serves some of the world’s biggest brands including 87 of the Top 100 AdAge US advertisers and its net revenue is expected to exceed $100m this year.

As part of the deal, the video advertising company will continue to operate independently “with Yahoo’s additional investment and global support” and retain its workforce of roughly 400 people, with its founder and CEO, Tod Sacerdoti, overseeing Yahoo’s video ad efforts.

Mayer claimed that video is one of Yahoo’s key growth areas (along with mobile, social and native advertising) and that the acquisition will turn Yahoo into “the largest” video advertising platform in the U.S. Mayer hopes that the acquisition could help the tech giant catch up with rivals Google and AOL in online video advertising, an area which is expected to grow around 56 percent to $5.96 billion this year in the U.S.and a value of almost $13 billion by 2018, according to market research firm eMarketer.

“Acquiring BrightRoll will dramatically strengthen Yahoo’s video advertising platform,” Mayer noted.

The $640 million Brightroll purchase is Yahoo’s second biggest acquisition, after the 2013 $1 billion Tumblr deal.

The deal is expected to close in Q1 2015.