Yahoo purchases video ad service BrightRoll for $640 million

By Staff Reporter - 11 Nov '14 23:09PM

Yahoo is at it again and this time the tech giant is buying digital video advertising service BrightRoll for $640 million in a bid to rev up its revenue after years filled mostly with financial futility.

In a blog post about the deal, Yahoo CEO Marissa Mayer said that video is one of the company's key growth areas (along with mobile, social and native advertising), and that the acquisition will make Yahoo's video ad platform "the largest in the U.S." She also said that BrightRoll is profitable, receives 2 billion ad requests each day, and expects to bring in $100 million in net revenue this year.

"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," said chief executive Marissa Mayer in a statement on Tuesday.

BrightRoll, based in San Francisco, helps to automatically place ads in videos displayed on personal computers and mobile devices. The company has raised $40 million in funding from investors including Adams Street Partners, Scale Venture Partners, Comerica Bank, True Ventures, Trident Capital, KPG Ventures, Michael Tanne, Fabrice Grinda, Auren Hoffman and Jeff Clavier, according to CrunchBase.

A jump in video advertising would also help offset Yahoo's slowing growth and boost declining display ad revenues.

"Acquiring BrightRoll will dramatically strengthen Yahoo's video advertising platform," Mayer predicted in a Tuesday blog post.

Although the company was happy with the acquisition, investors didn't seem to be as enthusiastic. Stock prices of Yahoo had a dip of 3 cents to $49.02.