AOL Buys Mobile Platform Millennial Media for $238 Million

AOL announced last week that it is purchasing mobile platform Millennial Media for $1.75/share. The deal equates to a $234 million purchase, reports Business

AOL announced last week that it is purchasing mobile platform Millennial Media for $1.75/share. The deal equates to a $234 million purchase, reports Business Insider. This purchase follows AOL’s own acquisition by Verizon in May.

AOL’s press release says the company is making the purchase to expand its mobile ad capabilities which currently serve more than 350 million monthly global consumers of its premium brands:”AOL is well positioned as consumers spend more and more time on mobile devices, and as advertisers, agencies and publishers become more reliant on programmatic monetization tools,” said Bob Lord, AOL president.

Michael Barrett, president and CEO of Millennial Media also commented about the deal.”By joining AOL, we will be adding additional mobile expertise to AOL’s growing technology assets,” said Barrett. “I am excited by what this acquisition means for our shareholders, our employees and our partners.”AOL outlined the benefits of the deal, from its perspective, in its September 3 announcement:

Add a leading supply-side platform for app monetization with over 65,000 apps to its publisher suite of offerings
Add significant mobile brand advertising scale across ONE by AOL, AOL’s advertising platform
Have access to approximately 1 billion global active unique users and robust addressable and cross-screen targeting capabilities
Accelerate its mobile position in key international markets, including Singapore, Japan, UK, France and Germany
Add world-class engineering, sales and product talent that specialize in mobile to AOL

In its analysis of the deal, TechCrunch says Verizon acquired AOL to expand its reach. AOL’s subsequent purchase of Millennial Media continues that strategy by giving AOL, and thus Verizon, access to third parties.Of course, the deal must pass a number of regulatory hurdles, but the deal is expected to close this fall.Insider Take:As Verizon continues to build its empire, AOL is a key piece of the puzzle, helping it to get its share of the mobile ad market, one of the fastest-growing online advertising segments. According to Cowen & Company, as cited by Business Insider, mobile advertising will grow from a $3.8 billion industry now to $9.2 billion by 2018, assuming an annual compound growth rate of 35%.With this acquisition, it looks Verizon and AOL want more than their fair share. They want to lead the pack.~ Dana E. Neuts, Subscription Insider

Filed in Business Strategy, Mergers and Acquisitions, News, Revenue and Sales, Subscription Apps

Dana E. Neuts

Dana Neuts is Subscription Insider's Editorial Director, covering our daily subscription news as well as member features, case studies, premium content, and reports. Dana is also a writer, editor, marketer and communications professional. Her work has appeared in AARP Bulletin, The Seattle Times, Seattle Business, 425 Business, 425 Magazine, South Sound Magazine, Northwest Travel and more. Her specialties include business writing, community news, senior issues, travel and, of course, subscriptions!