AOL boosts mobile advertising reach with $250M Millennial Media buy ahead of Verizon's go90 launch

AOL, which rebuilt itself into an attractive and acquirable target in part through its video and advertising strategies, is now making a similar proposition to struggling mobile ad platform Millennial Media. The two companies have agreed to a deal that will see Verizon-owned AOL buy the firm for approximately $250 million.

Verizon (NYSE: VZ) purchased AOL in May for $4.4 billion, gaining the provider's robust advertising capabilities including its ONE by AOL platform. The solution is expected to be a key component of Verizon's pending mobile-first OTT video service, go90, which is expected to debut soon.

Millennial Media sells ads across several mobile websites and apps, The Wall Street Journal reported, and recently added a programmatic option. But, while it's publicly traded and "has the potential" to deliver ads to over 65,000 apps, Millennial is overshadowed in market share by mobile ad giants Google and Facebook.

For AOL, the acquisition gives it the opportunity to scale up its mobile advertising strategies and build its presence in overseas markets including Asia-Pacific and Europe. Millennial is headquartered in Baltimore but has offices throughout the U.S. and internationally in London, Paris, Hamburg, Singapore and Tokyo. The company will bring its engineering, sales and product staff into AOL's fold.

"By joining AOL, we will be adding additional mobile expertise to AOL's growing technology assets," said Michael Barrett, president and CEO of Millennial Media, in a joint release announcing the acquisition.

The merger will also give AOL access to potentially 1 billion active unique users, providing more addressable and cross-screen targeting opportunities for its clients.

Bob Lord, AOL's president, sees the purchase as adding to advertisers' monetization opportunities. "As we continue to invest in our platforms and technology, the acquisition of Millennial Media accelerates our competitive mobile offering in ONE by AOL and enhances our current publisher offering with an 'all in' monetization platform for app developers," he said.

As part of the acquisition deal, AOL made a tender offer of $1.75 per share based on Millennial's share price at the close of the stock market on Sept. 2. The offer is a 31 percent premium on that closing price.

Barrett confirmed in early August that Millennial was in buyout talks, but didn't name their suitor, though AOL was at the top of the rumored buyers.

For more:
- see the release
- see this WSJ article (sub. req.)

Related articles:
Verizon's go90 video service to debut in the 'coming days,' Bloomberg reports
Advertising: AOL adds premium video formats, while Yahoo boasts successful integrated marketing strategy with Honda
Verizon's ad-supported OTT pricing may signal new business models to come
Verizon snaps up AOL for $4.4B, locking in mobile video, advertising tech

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