AOL/Verizon looking to acquire Millennial Media – Technical.ly Baltimore

Verizon only completed its .4 billion acquisition of AOL late last month, but now the newly merged companies are already reportedly on the hunt for their next big buy. Sources tell TechCrunch that the company has been in the process of buying mobile ad network Millennial Media.

As said by TechCrunch, AOL has been eyeing Millennial Media for weeks with a purchase price of between $300 million and $350 million, but its plans to purchase the mobile ad firm were delayed by Verizon’s acquisition of AOL, which closed in June. Verizon’s push into online video, which will focus mainly on mobile devices, will require mobile ad technology to support monetizing the service. The company went public in 2012 and entered the market with a $2 billion valuation, but has struggled to maintain those figures.

Millennial Media stock now sits at $1.88 a share. If an acquisition does take place at the rumored price, AOL would be paying about one-times sales for the company, and Millennial Media’s advertising technology could be folded into Verizon’s mobile video ambitions. Deals like these help grow and shape the entire ecosystem; it recognizes the value of mobile advertising as Verizon evolves from a traditional telco player to acquiring one of the world’s largest media properties.

Strategically, Millennial Media would be a good fit for AOL, and it would significantly increase AOL’s presence in mobile display ads.

AOL started “kicking the tires” on Millennial weeks ago, one source says, but things were slowed down by AOL itself getting acquired by Verizon. “To scale in Asia, you need an app exchange”.

Part of the reason for AOL’s and Verizon’s interest in mobile advertising is because this is where the growth is: as the number of smartphones and tablets has continued to expand, so has consumers’ usage of mobile apps and mobile web-based services. Emarketer predicts the mobile ad market will be worth $100 billion in 2016, making up 51% of the entire digital ad market. “The man is a genius”.

Now what: While Millennial Media makes sense as an acquisition target, the company has been a disaster since going public in 2012.

Aol CEO Tim Armstrong might have a phone company as his new boss, but he’s apparently still looking to buy ad-tech. The possible implication is that Millennial wants to ensure it retains these execs in the event it is bought.