Yahoo acquires video ad platform BrightRoll for $640 million

Yahoo has bought video advertising platform BrightRoll for $640 million.

The deal is the second major one to be carried out under chief executive Marissa Mayer after last year's $1.1 billion Tumblr acquisition.

BrightRoll will help in strengthening Yahoo's efforts in video ads, merging Yahoo's desktop and mobile video advertising business with BrightRoll's programmatic video platform, according to Yahoo. It added the deal would help it become the "biggest video advertising platform" in the US.

Mayer said that Video along with mobile, social and native is "driving a surge in digital advertising".

"[Yahoo is] a large, growing and profitable business with net revenues expected to exceed $100 million this year. I've spent time with Tod Sacerdoti and his leadership team and I cannot wait to have him, his vision, and his team here at Yahoo," Mayer added.  

She added, in a blog post: "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."

Tod Sacerdoti, BrightRoll CEO and founder, said he believed 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." 

He added: "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."

Last October, Yahoo reported third quarter ad revenue had decreased by five per cent compared with the same period in 2013. This means it is struggling to keep up with Google, whose own revenues grew by 17 per cent grow in its third quarter.

Yahoo said it expects the deal to close in the first quarter of 2015. Until then, BrightRoll will continue to offer its current suite of products and services. 

In other news, investors have signalled they are unhappy with the direction of the Yahoo as a company. As reported by IT Pro's sister publication PC Pro, two of Yahoo's biggest investors want the company to merge with AOL, and let AOL chief executive Tim Armstrong take over the combined company, pushing Mayer aside.