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Old 11-12-2014, 03:58 PM
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Daljeet Daljeet is offline
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Default "Yahoo buys digital ad service BrightRoll for $640 million"

Yahoo is buying digital video advertising service BrightRoll for $640 million (roughly Rs. 3,900 crores) in the Internet company's latest attempt to boost its revenue after years filled mostly with financial futility.

The acquisition announced Tuesday marks Yahoo's first major purchase since reaping a $9.4 billion windfall in September by selling part of its stake in a rapidly rising Internet star, Chinese e-commerce service Alibaba Group Holding Ltd.

Yahoo Inc. has promised to distribute at least half of the $6.3 billion (roughly Rs. 38,774 crores) in after-tax proceeds from the Alibaba stake sale to its shareholders. That gives CEO Marissa Mayer the option of spending the rest on acquisitions that could enable the Sunnyvale, California, company to recover some of the ground that it has lost to rivals Google Inc. and Facebook Inc. in the booming online ad market.

BrightRoll, based in San Francisco, helps to automatically place ads in videos displayed on personal computers and mobile devices. Since its founding in 2006, it has built relationships with most of the biggest advertisers in the U.S., helping the service generate more than $100 million in annual revenue, according to Yahoo.

That makes the BrightRoll deal look quite different from the only larger acquisition that Yahoo has made since hiring Mayer as its CEO in July 2012. Mayer bought online blogging service Tumblr for $1.1 billion (roughly Rs. 6,770 crores) last year, even though that New York company hadn't yet proven it could make money.

In contrast, BrightRoll already is profitable, according to Yahoo. Meanwhile, Tumblr isn't expected to bring in $100 million in annual revenue until next year, at the earliest.

"Acquiring BrightRoll will dramatically strengthen Yahoo's video advertising platform," Mayer predicted in a Tuesday blog post.

Investors didn't seem to be as enthusiastic about the deal. Yahoo's stock dipped 3 cents to $49.02 in extended trading.


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