Technology

AOL Splashes Out $405 Million for Video Ad Platform Adap.tv

AOL Splashes Out $405 Million for Video Ad Platform Adap.tv
Image credit: Business Insider Video
Tim Armstrong
2 min read
Opinions expressed by Entrepreneur contributors are their own.

AOL took another step today toward becoming a major player in digital video with the $405 million purchase of Adap.tv, a video advertising platform. The acquisition of Adap.tv is the largest of AOL chief executive Tim Armstrong's tenure so far.

Adap.tv will be an independent part of AOL's video division. It offers publishers programmatic ad-buying solutions, which means that ad buys are done through computational algorithms, like much stock trading nowadays. On Adap.tv's platform, brands can buy and sell video advertising inventory, such as 30-second ads that air before YouTube videos.

"AOL is a leader in online video, and the combination of AOL and Adap.tv will create the leading video platform in the industry," said Armstrong in a statement. "The Adap.tv founders and team are on a mission to make advertising as easy as e-commerce, and the two companies together will aggressively pursue that vision."

AOL also reported earnings today. While its second-quarter revenue increased 2 percent to $541.3 million from the second quarter of 2012, its income plunged 97 percent to $28.5 million from $970.8 million at this time last year. But that quarter's numbers were boosted by a patent licensing deal that netted the company more than $1 billion, according to earnings reports, so it isn't an apples-to-apples comparison.

AOL is shifting to branded media content as its subscription business continues to decline, though it isn't shrinking as fast as one might expect. Millions of people are still paying to connect to the internet through AOL. The internet giant earned $166 million on subscriptions in its most recent quarter, a 5.4 percent decline from the previous year's second quarter.

That number is an improvement on the 12-percent decline in subscription revenue AOL saw during the second quarter of last year, which was the lowest rate of decline in five years, the company said. Obviously, AOL can't rely on dial-up subscribers forever, and tapping the revenue they generate to help pay for a forward-looking acquisition looks like the right move.

Related: YouTube Apps Suggest Videos to Watch Next

More from Entrepreneur

Are paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.
Get Your Quote Now

One-on-one online sessions with our experts can help you start a business, grow your business, build your brand, fundraise and more.
Book Your Session

Whether you are launching or growing a business, we have all the business tools you need to take your business to the next level, in one place.
Enroll Now

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.

3 Ways a Virtual Reality Pioneer Is Rebranding the Form