Yahoo acquires BrightRoll for $640 million

Yahoo has completed a $640 million (£401.5 million) deal for video advertising platform BrightRoll.

It marks the company’s second-biggest investment since Marissa Mayer took the helm in July 2012, trailing just behind last year’s $1 billion (£628,000) acquisition of Tumblr.

In a blog post announcing the purchase, Mayer described video advertising as “Display 2.0” and reiterated her view that it will soon replace branded banners. She added that video was one of Yahoo’s four “strategic pillars”, as well as one of their key growth businesses alongside mobile, social and native.

It appears that Mayer sees BrightRoll as potentially the final piece of the puzzle, pointing out that Yahoo’s mobile and native performance was showing strong signs of improvement and that Tumblr was expected to contribute around $100 million (£62.8 million) in 2015.

She suggested that the arrival of BrightRoll would give Yahoo the largest video advertising profile in the US, assisting in her goal of “return[ing] our iconic company to greatness”.

Yahoo will be hoping that this deal will help it remain a key player in the digital advertising sector. Its US market share dropped to 5.8% last year, and is predicted to suffer a further slide in 2014.

The BrightRoll reaction

BrightRoll CEO and co-founder Tod Sacerdoti declared himself “thrilled” with the deal, expressing his excitement at the opportunity to “accelerate the growth of the video advertising ecosystem”.

Founded in 2006, BrightRoll has quickly become the leading video advertising provider. In 2013, comScore revealed that the company had reached the most unique visitors in the US, while Yahoo was doubtless also attracted by BrightRoll’s links with over 80 of the country’s top advertisers.

It is not yet clear what Sacerdoti’s role will be within Yahoo, but he will reportedly be bringing with him his entire workforce of over 400, as well as his own management team.

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