Commentary

Public Ad Tech Firms Ride Waves Of AOL-Verizon Deal

The $4.4 billion mega AOL-Verizon deal is having a ripple effect on the stock exchange. AOL, while much more than just an ad tech player, has touted its programmatic success in each and every earnings call for the past 18-plus months. It was to be expected, then, that following AOL's sale to Verizon, other ad tech companies would act accordingly.

Rocket Fuel (up about 8%) and Rubicon Project (up over 5%) have both seen their stock prices rise. AOL’s stock has risen over 18%.

The handful of video-focused ad tech companies on the public market have not fared quite as well, however. YuMe, TubeMogul and Tremor Video all saw their stock prices dip during day-trading on Tuesday.

One of the principal draws of AOL’s ad tech stack is Adap.tv’s technology -- the programmatic video ad tech firm AOL scooped up for over $400 million nearly two years ago. It's interesting to see how the publicly traded companies seem to split into two camps: Those with a focus on video have seen a slight dip, while those with a focus on automation at large have risen.

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Yahoo -- whose closest connection to the programmatic ad world is through BrightRoll, a video ad tech company --  is the only one that bucks that trend. Its shares were up slightly during the day.

Seeking Alpha pointed out the ripple effects of the AOL-Verizon deal early Tuesday morning. They quote Citi’s Mark May as saying: “We view this deal as a positive for YHOO as it shows there are strategic buyers for this type of asset and because we view YHOO as a strong asset that is currently only valued at 1x our 2016 EBITDA estimate."

Seeking Alpha adds: “With Yahoo spinning off its Alibaba stake later this year and exploring options for its Yahoo Japan stake, core Yahoo might soon be available by itself.”

Rumors of some type of Yahoo-AOL merger have existed for nearly a decade -- it’s no surprise to see the industry turn its attention to Yahoo after Yahoo’s longstanding penciled-in partner has officially been scooped up (by someone else).

Other large companies on the public market with ad tech stacks that compete with AOL could either be not reached for immediate comment (Facebook) or declined comment (Google). Yahoo also declined to comment.

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