Yahoo to buy video advertising platform Brightroll for $640m

Yahoo announced it will pay $640m in cash for video advertising platform Brightroll, its second-biggest purchase under chief executive Marissa Mayer.

The internet company has struggled to keep pace with Google and Facebook in ad revenues and growth. Mayer said on Tuesday that the purchase would reinforce the company’s plans in video advertising. Yahoo’s share of the $43.1bn US digital advertising market fell to 5.8% in 2013, according to analyst eMarketer, and is expected to dip again this year.

“Video is display 2.0. It’s what brand advertisers love. It’s a format that elegantly and easily transitions from broadcast television to PC to mobile and even to wearables. This is why video is a key part of our strategy,” Mayer said in a blogpost.

She said she thought video could reinvent and replace banner advertising, a mainstay of online ads.

Brightroll’s platform acts as an intermediary for advertisers and publishers. Advertisers can plan and target video ad campaigns using the service, while publishers use it to add advertising inventory into their content. The service works across web, mobile and connected devices such as TVs.

Tech site Techcrunch first reported last month that Yahoo was in talks with the eight-year-old San Francisco-based company, which services more than 80 of America’s largest advertisers.

“Online video advertising is increasingly fragmented across thousands, if not millions, of sites and mobile apps. More so than with traditional broadcast television, advertisers are seeking ways to buy online video advertising at scale across many sites in fewer, simpler transactions,” said Mayer.

US digital video advertising will total $5.96bn this year, according to eMarketer, up 56% over 2013. By 2018, that figure is expected to more than double, reaching $12.8bn. Google’s YouTube, the largest player in online video, will make $1.13bn in video ad revenues in the US, accounting for 18.9% of the US digital video ad market.

The Brightroll purchase is Yahoo’s first big buy since it sold part of its stake in China’s internet giant Alibaba for $5bn. It is also the largest since Mayer bought Tumblr for $1.1bn in 2013.

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