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AT&T to acquire programmatic ad exchange AppNexus for a reported $1.6B
AT&T Inc. today revealed plans to acquire AppNexus Inc., the operator of a digital ad exchange touted as the biggest independent marketplace of its kind.
The announcement comes a week after rumors of a potential deal first started to emerge. Insiders told the Wall Street Journal that AT&T was expected to pay around $1.6 billion for AppNexus. Cheddar, the online-only financial news network, separately cited a source as saying that the advertising provider was likely to sell for at least $2 billion.
The latter figure is at the high end of the valuation range that AppNexus reportedly planned to seek at one point as part of an initial public offering. But even if the value of the acquisition is closer to the $1.6 billion figure reported by WSJ, it’s still a respectable exit for the company’s investors. AppNexus has raised about $344 million from a consortium that included Khosla Ventures, News Corp. and Microsoft Corp. among others.
The deal is set to buy AT&T an ad marketplace with significant global reach. AppNexus claims that its exchange is used by more than 34,000 publishers and 177,000 brands to deliver advertisements to online audiences. The platform allows companies to bid automatically, or “programmatically,” for ad space using algorithms optimize their marketing campaigns.
Buying AppNexus should enable AT&T to more directly compete with Google Inc. and Facebook Inc., which control the lion’s share of the online advertising market in the United States. The deal is also set to extend the carrier’s international reach, since AppNexus serves up ads across five continents.
The company is set to move under the wing of AT&T’s advertising and analytics group as part of the transaction. Once the deal closes, the carrier plans to augment AppNexus’ targeting algorithms using the data it possess about its more than 170 million subscribers. Additionally, AT&T will use the ad platform to better monetize the TV properties it obtained through the recently closed acquisition of Time Warner Inc. for $85 billion.
“Ad tech unites real-time analytics and technology with our premium TV and video content,” Brian Lesser, the head of AT&T’s advertising and analytics group, said in a statement. “The combination of AT&T advertising & analytics and AppNexus will help deliver a world-class advertising platform that provides brands and publishers a new and innovative way to reach consumers in the marketplace today.”
AT&T expects to complete in the deal in the third quarter.
Photo: AT&T
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