The US$900 million purchase of Media.net by a consortium of Chinese firms will eventually put the provider of contextual ad services to Yahoo and Bing into the hands of a telecom firm.
Bloomberg on Monday reported that Media.net, a startup whose publisher inventory is available through major demand-side platforms and ad-exchanges, will be the subject of what is essentially a “reverse merger,” where a private company acquires a public one, skipping the step of an actual IPO. The Chinese investors will eventually sell the company to Miteno Communication Technology Co.
“Our team has spent the last several years putting together one of the most comprehensive platforms for ad tech, and we are just getting started,” Media.net co-founder and CEO Divyank Turakhia said in a statement. “The acquisition will enable Media.net to be an even greater platform for innovation and investment on a global scale. Together, we can accelerate the company’s growth and deploy new products and services that will add value for our customers. Media.net’s leadership team and employees are excited to enter into this new phase of growth.”
A blogger on TechCrunch compared the size of the Media.net deal to when search engine Google acquired AdMob six years ago, followed by Twitter’s 2013 acquisition of ad server MoPub. BusinessInsider, meanwhile, interviewed experts who suggested ad tech acquisitions by Chinese firms are likely to continue, in part because they may be undervalued assets in the West and also because it opens up lucrative online opportunities.
“I think it’s probably good for people to see that these companies have real value, that even if certain segments of the market aren’t currently valuing them [highly], other segments are,” Tim Cadogan, CEO of ad-tech company OpenX, told the company. “These are smart investors. They are not throwing money about here. They have a reason for doing this and they want to make a return.”
Zhiyong Zhang, chairman of Miteno Communication Technology, told Forbes the size of Media.net’s technology stack was what ultimately made the deal attractive.
“The company’s success in the US, which is arguably the world’s most competitive AdTech market, is impressive,” he said. “We look forward to propelling Media.net’s growth in China,”
