Yahoo has taken a big step forward in CEO Marissa Mayer’s plan to turn the Web portal into a video hub. Fortune reports that the company agreed Tuesday to purchase video ad service BrightRoll for $640 million.
Here’s an explanation of what BrightRoll does, from an article in Bloomberg last year, and it compares BrightRoll to its number one competitor, Google:
“BrightRoll Inc., a San Francisco-based company that helps marketers place video ads on websites, has surpassed Google when ranked by number of online video ads in two of the last three months, according to researcher ComScore.
“Google makes money from selling slots for commercials that run before users view clips on YouTube, which it owns and operates. BrightRoll matches marketers to competing websites, and takes a cut. That has helped it to siphon advertisers away from Google in a market that, according to AccuStream Research, jumped 52 percent [in 2012] as more people watch television and movie programming online.”
The acquisition of BrightRoll had been long rumored and was expected by analysts keeping an eye on Yahoo.
“BrightRoll is expected to produce more than $100 million in revenue this year, according to Yahoo, which added that it will bring on BrightRoll’s roughly 400 employees to join Yahoo’s digital video advertising team,” Fortune reports. “The deal had been expected since TechCrunch reported last month that the two companies were in negotiations.”
In a statement, Mayer said: “Here at Yahoo, video is one of the largest growth opportunities, and BrightRoll is a terrific, strategic and financially compelling fit for our video advertising business.”
The acquisition is expected to close in early 2015.