Yahoo buys video-advertising company BrightRoll for $640mln

PanARMENIAN.Net - Yahoo didn't wait long to put to use its newfound riches from the Alibaba IPO. On Tuesday, Nov 11, it acquired video-advertising company BrightRoll for $640 million in cash, USA Today reports.

"BrightRoll is a terrific, strategic and financially compelling fit for our video-advertising business," Yahoo CEO Marissa Mayer said in a statement. "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 purchase, which brings Yahoo's expenditures on acquisitions to $1.6 billion since Mayer took over as CEO in July 2012, is Yahoo's boldest to stanch lost Web sales to competitors.

The onetime market leader is projected to fall to fourth this year, according to researcher eMarketer. It reported in July that Yahoo collected less than 3% of online ad revenue last year. Google was tops, with nearly 32%, while Facebook accounted for about 6%. Microsoft is projected to exceed Yahoo this year.

Though a small slice of the overall market, video ads are growing at a brisk pace. Spending on Web video ads is expected to soar 56% to nearly $6 billion this year, while total digital ad revenue is expected to improve 17% to $140.2 billions.

Riding the popularity of its YouTube video business, Google commands Web video ad sales, with about 19%, eMarketer says. Yahoo hopes to counter Google's sheer volume of user-generated videos with professional video content produced by journalist Katie Couric and tech reviewer David Pogue among others.

Yahoo was able to buy BrightRoll with cash after it sold shares worth about $9 billion in the initial public offering of Chinese e-commerce powerhouse Alibaba this year.

Shares of Yahoo dipped nearly 1% to $49.05 in trading Tuesday and did not initially move in after-hours trading following the BrightRoll acquisition announcement.