AOL Buys Adap.tv, Predicts Ad Money Move From TV14 Aug, 2013 By: Doug McPherson
NEW YORK – Not long after AOL announced it was buying online video advertising company Adap.tv last week, AOL’s CEO Tim Armstrong said Adapt.tv will help AOL in a “decade-long industry shift that will see tens of millions of ad dollars migrate from TV to the Internet.”
Last Wednesday, AOL said it agreed to buy Adap.tv, which has software that matches advertising buyers and sellers, for $405 million – its biggest deal under Armstrong’s management team. In 2011, AOL acquired the Huffington Post for $315 million and has in recent quarters repeatedly emphasized the upside potential for online video.
Armstrong has openly praised Adap.tv for its growth above the industry average and its talent. "The combination of AOL and Adap.tv is expected to create the only global company with a full end-to-end solution and video stack for publishers and advertisers. It’s a very smart and well-targeted use of our capital," he said. “Acquiring Adap.tv will make AOL a clear global leader in the most important growth segment in our industry – online video."
He added that two trends are prevalent in the video space right now: “The movement from linear television to online video and the shift from manual transactions to programmatic media buying."
Adap.tv's CEO Amir Ashkenazi told RTM Daily that Adapt.tv agreed to the deal with AOL because of “the vision of the industry that we share. They’ve invested and continue to do so very heavily in the huge potential that the $240 billion TV industry moving to linear TV presents. To that end, this partnership empowers our publishers and advertisers with an even better platform.”
Ashkenazi said Adap.tv would operate independently as part of AOL’s video organization and be included as part of the overall solution offered by AOL Networks to its publishers and advertiser partners. “As such, joining AOL allows us to use additional resources to accelerate our momentum. Down the road we will look at all that we have and determine what is important to integrate, without disrupting the businesses,” Ashkenazi added.
The announcement of the Adapt.tv deal came the same day digital ad firm YuMe made its Wall Street debut. AOL CFO Karen Dykstra said Adapt.tv can scale further and faster than ad companies such as Tremor Video and YuMe.
The Adap.tv deal is expected to close in the third quarter. Adap.TV was founded in 2007 and is privately held.