Oracle's BlueKai Buy Broke Our Crystal Ball

Leave it to a company named Oracle to prove RTBlog’s predictive powers wrong.

Three weeks ago I wrote an RTBlog titled: “Expensive Tech Sedates Consolidation.” I spoke with David Siemer, co-founder of Siemer Ventures, about consolidation and why it has been slower than expected.

One reason that Siemer gave is one I have heard before: that the companies worth buying are too big to be purchased.

Siemer said then: “Yahoo, Google, AOL are all buyers -- and occasionally they make acquisitions -- but for the most part, once you get below those guys, there are very few buyers that can actually pay for an ad tech platform.”

Cough, cough.

Oracle on Monday announced plans to acquire BlueKai, a data management platform (DMP). Business Insider first reported rumors of a potential Oracle-BlueKai deal over the weekend, and while terms of the acquisition were not disclosed, Business Insider reports it to be in the range of $400 million.

When reached, BlueKai said they are "very excited" but had no further comments. Oracle declined to comment.

If the deal was in the $400 million price range, it means Oracle valued BlueKai much more than Neustar valued Aggregate Knowledge, another data management platform, which was purchased for $119 million in late October. To put it in perspective, programmatic ad platform Adap.tv was purchased by AOL for $405 million in August.

The two companies -- BlueKai and Adap.tv -- offer different services, but both services are vital when it comes to programmatic trading.

By the sound of it, Oracle bought BlueKai not only for its data management platform, but also for its data. In the press release, Oracle touts BlueKai’s third-party data marketplace, which it claims has profiles on more than 700 million users.

It’s not surprising that BlueKai was purchased, or that it was purchased for so much. The company has become a respected industry player; it has been pegged as a “leader” in the DMP space and has appeared near the top of lists when it comes to fast-growing technology companies.

Still, following AOL’s $405 million purchase of Adap.tv, the ad technology industry saw a slew of IPOs rather than M&A activity. Several of these companies going public or looking for buyers are young and venture-backed, so the companies are pressured to make an “exit” and pay back investors.

The “exit” race heated up during the second half of 2013, and will continue through 2014. And while I’m still inclined to believe there will be more IPOs than $400 million acquisitions, Oracle’s BlueKai buy definitely threw a wrinkle in the “expensive tech sedates consolidation” narrative.

"Broken crystal ball" photo from Shutterstock.

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