14 DAY TRIAL // Yahoo is reportedly looking into making yet another purchase, although this one won’t be just another acqui-hire like the company has accustomed us all by now.
This time, Yahoo has set eyes on BrightRoll, the cross-platform digital video advertising service. Considering the extensive acquisitions Yahoo has made to build up its video and video advertising content, this new one falls right in line.
TechCrunch reports that while the deal hasn’t yet been made public, the term sheets have been signed already. If the deal is completed, the price for BrightRoll could be anywhere from $500 million (€390 million) to $1 billion (€780 million), although it seems that the mid area is the most likely, with $700 – $725 million (€546 – 565 million) being the go-to price.
Yahoo has been under pressure in the past few weeks to clean up its business. In the past couple of years, the company has been spending a lot of money on acqui-hires but getting very little return on these investments. Not even spending $1.1 billion (€858 million) on Tumblr has paid off so far, although that’s more of a long-term bet than an immediate return of investment deal.
Pressure on Yahoo
One investor from Starboard Value has sent Yahoo a letter a few weeks back, irritated with the company’s way of doing business. It told Mayer that it would be better if it found a good way to sell its Asian actives, namely its shares in Alibaba, and to just call it a day and sell out to AOL. AOL’s CEO Tim Armstrong has noted that there are no plans for such a merger in the company’s future.
Since Yahoo is getting ready to announce its third quarter earnings report, Marissa Mayer is also expected to lay out a new plan for the company, which includes less cheap acqui-hires and more serious ones where there’s more value in the purchase.
BrightRoll, which is a platform that works across web, mobile and even connected TV devices, acts as an intermediary and service for both advertisers and publishers. It competes against the likes of Google and YouTube, which would give Yahoo a good spot at battling the biggest Internet company in the world.
The platform allows advertisers to plan, target, optimize and report digital video ad campaigns. At the other end, publishers plug BrightRoll ad inventory into their content. All in all, this is one of the biggest platforms of its kind. ComScore estimates that it’s the number 1 in ads served and largest reach to unique video viewers, according to data from June 2014.