Yahoo has revealed a definitive agreement to acquire programmatic video advertising platform BrightRoll in a deal reportedly worth US $640-million.
The acquisition is intended to accelerate Yahoo's strategy of increasing revenue through search, communications and digital content through growth in mobile, social, native, and video advertising.
This is the second major acquisition by Yahoo in the online video space. In July this year the company bought online video streaming platform provider RayV.
The online search company will now be able to combine its premium desktop and mobile video advertising inventory with BrightRoll's programmatic video platform and publisher relationships.
BrightRoll is on track to post net revenues in excess of US $100 million for 2014 and Yahoo expects the transaction to make it the largest video advertising platform in the US, significantly enhancing its net profit.
"Video, along with mobile, social, and native, is driving a surge in digital advertising. Here at Yahoo, video is one of the largest growth opportunities, and BrightRoll is a terrific, strategic and financially compelling fit for our video advertising business," said Yahoo CEO Marissa Mayer. "As with every acquisition, we have been extremely thoughtful about our approach to the video advertising space. 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. The combination builds positive momentum for Yahoo's broader display advertising business in 2015."
According to Yahoo, BrightRoll will continue to offer its current suite of products and services and will retain its team of approximately 400 employees.
"We believe the next step for programmatic video advertising as an industry is to extend and standardise globally, make cross-device buying simple and measurable, and complement and integrate with TV," said BrightRoll CEO and founder Todd Sacerdoti. "We are excited to join Yahoo to materially advance efforts in each of these areas. We're still in the early innings as an industry, and together, BrightRoll and Yahoo are committed to the vision of helping grow the entire video advertising ecosystem."