Updated September 3, 12:30 p.m.
AOL, now owned by Verizon, plans to buy mobile advertising company Millennial Media in a deal worth about $248 million.
The deal would drastically increase AOL’s technical capabilities and audience reach within mobile advertising. Millennial Media, based in Baltimore, runs a marketplace where publishers and marketers can buy ads or sell ad space on mobile websites, videos and apps. Around 65,000 apps auction off ad impressions through its platform, collectively representing some 1 billion active users globally.
Millennial also brings an extensive suite of mobile-focused ad tech tools it’s pieced together through a string of acquisitions. In 2013, it acquired a demand-side platform (the technology used by media buyers to access programmatic exchanges) and data management platform when it bought JumpTap, and last year it picked up a competing publisher network and supply-side platform (the technology used by publishers to auction ads and track yields) from Nexage.
For AOL, which is in the process of building a holistic, end-to-end programmatic ecosystem it’s calling the One platform — and for Verizon, which bought AOL largely for its ad tech and data — Millenial represents a large collection of capabilities that it can begin integrating into its larger tech stack. Millennial’s mobile tech complements AOL’s already strong offering in online video, which it established through its 2013 acquisition of Adap.tv.
AOL is paying $1.75 for each share of Millennial Media, a 31% premium from its closing price Wednesday of $1.34. The deal is expected to close in the fall.
Millennial Media has struggled financially over the past year, unable to compete with larger mobile competitors like Google, Facebook, Yahoo’s Flurry and Twitter’s MoPub. During its IPO in 2012, Millennial reached a valuation of $2 billion, though it’s worth nowhere near that today. In fact its two biggest acquisitions of competitors JumpTap and Nexage together add up to more than AOL is paying for it ($225 million and $108 million respectively).
Analysts have been predicting a buyout for some time. Rumours of an AOL bid first surfaced in AOL-owned TechCrunch in July.
Verizon bought AOL in June for $4.4 billion as it attempts to cash in on the growing mobile advertising business. AOL’s online properties include The Huffington Post and TechCrunch.
