Verizon’s AOL is reportedly eyeing mobile ad network and ad exchange Millennial Media. TechCrunch, which is owned by AOL, first reported the story.
TechCrunch notes that price discussions are currently in the $300 million to $350 million range, well above Millennial Media’s current market capitalization of $202 million.
Fresh on everyone’s mind is Verizon’s recent acquisition of AOL for $4.4 billion, but prior to that deal, AOL had been on its own acquisition spree, so seeing it re-enter the M&A fray would come as no surprise.
Buying Millennial Media would also make sense for AOL, as the crown jewel of its ad tech stack is currently video. With mobile obviously top-of-mind for telco giant Verizon, AOL aiming to beef up its mobile tech capabilities is only fitting.
“This is no real surprise. We've been expecting some moves like this, and I expect there's more to come,” said Angela Steele, CEO of IPG’s Ansible Mobile. “Millennial is a logical acquisition given their global scale and fit with AOL's core business.”
“While AOL has tried valiantly to build out a footprint of mobile apps and content, it has very little in terms of mass reach on mobile. In addition, AOL has essentially no mobile app SDK distribution,” commented Eric Bosco, CEO of ChoiceStream. “Millennial Media, on the other hand, has a large publisher network and deep SDK penetration within the app ecosystem, but does not offer advertisers a true programmatic solution. So all in all, it seems like a smart move on the part of AOL who can now integrate this mobile inventory into their programmatic platform.”
Bosco added that he thinks the report “seems to reconfirm the opinion that the Verizon acquisition of AOL was primarily ad-tech focused, not content focused.”
This would not be AOL’s first time buying one of the biggest ad networks on the market. It happened over eight years ago when it absorbed Third Screen Media, which ultimately failed to gain traction inside AOL.
When reached for comment, AOL said: “[We] don’t have anything to share. It’s just rumor and speculation.” Millennial Media did not immediately respond to inquiries regarding the report.
However, a former Millennial Media executive told Real-Time Daily that the mobile ad net’s value proposition was “always to be an independent full-stack mobile company to counter the likes of Google and others (including AOL),” but noted that “based on the performance of Millennial Media over the last several quarters, it’s not surprising that an exit might be the only option at this point.”