Online marketing services company ValueClick confirmed it has acquired mobile ad network Greystripe for $70 million in cash. ValueClick said the move would give it "immediate scale" in the U.S. mobile ad market, expected to reach $1.1 billion this year and to nearly double by 2013.
TechCrunch broke the news of the acquisition.
San Francisco-based Greystripe has built its business creating and delivering iAd-like rich media advertising within applications on the iPhone, Android devices and other smartphone and tablet platforms, including the iPad.
The company has raised $18.1 million in venture financing and is expected to contribute $24 million to $26 million in revenue and $2 million to $3 million to ValueClick this year.
Greystripe's ad network delivers billions of impressions each month to more than 30 million users across 3,500 apps. Under the deal, the company will be run as a wholly owned subsidiary of ValueClick and Greystripe CEO Michael Chang will report directly to ValueClick chief executive Jim Zarley. The Greystripe brand will be retained in some form and ValueClick does not immediately plan any layoffs as a result of the transaction.
ValueClick, which ranks as the eighth-largest ad network, with a monthly audience of 165 million, said the acquisition would aid the company's push into brand advertising as well as mobile. It suggested that Greystripe's in-app and mobile Web campaigns can be cross-sold to the ValueClick advertiser base, potentially adding inventory to the mobile network through its thousands of publishing partners.
Greystripe had been rumored as a possible acquisition target among other independent mobile ad networks following Google's $750 million acquisition of AdMob in 2009 and Apple's $270 million for Quattro Wireless in 2010.
The launch of Apple's iAd platform ended up benefiting in-app ad providers like Greystripe by raising awareness of the emerging ad segment and expanding the market. The company's particular expertise is converting Flash-based ads into the iPhone-friendly HTML5 format as a less costly alternative to running an iAd unit.
"Greystripe accelerates ValueClick's move 'up the marketing funnel' with brand advertisers and gives ValueClick Media immediate scale and expertise in the large and fast-growing mobile ad market," stated Zarley. "We see great traffic and revenue synergy opportunities between ValueClick and Greystripe, and we're looking forward to working closely with the Greystripe team to take full advantage of the opportunities that this combination offers."
ValueClick said it plans to discuss the acquisition in greater detail during its first-quarter conference call on May 3. The deal is likely to spur renewed speculation around the acquisition of remaining independent mobile ad networks, such as Millennial Media, JumpTap and Mojiva, by major Internet players like Microsoft or Yahoo.