I’m thrilled to announce that we are acquiring BrightRoll, a leading programmatic video advertising platform.
Video is display 2.0. It’s what brand advertisers love. It’s a format that elegantly and easily transitions from broadcast television to PC to mobile and even to wearables. This is why video is a key part of our strategy.
It’s one of our four strategic pillars: search, communications, digital magazines and video.
It’s also one of our growth businesses: mobile, social, native, video.
We say that video is display 2.0 because we believe it can reinvent and replace the branded banner advertisement. Video, along with mobile, social, and native, represents a new format of online advertising that has the potential to help us transform and modernize Yahoo’s display business and return it to growth.
As we discussed on the last earnings call, we have achieved significant momentum on mobile (projecting $1.2 billion in gross revenues this year, which maps to $700 million in GAAP revenues after TAC) and native (projecting approximately $250m in GAAP this year). Social, through Tumblr, we expect will be a $100m business for Yahoo in 2015. We have made good investments that are just beginning to pay dividends in these growth areas. We need to hit equally meaningful milestones for video.
Online video advertising is increasingly fragmented across thousands, if not millions, of sites and mobile apps. More so than with traditional broadcast television, advertisers are seeking ways to buy online video advertising at scale across many sites in fewer, simpler transactions. BrightRoll provides an effective solution, aggregating high-quality publishers together into a unified network and utilizing programmatic advertising to allow real-time buying on the largest set of online video advertising inventory available. BrightRoll’s approach not only benefits advertisers and publishers, but also improves experiences for consumers, through better quality, more relevant advertisements.
Acquiring BrightRoll will dramatically strengthen Yahoo’s video advertising platform, making it the largest in the US. BrightRoll is the industry’s leading programmatic video advertising platform for reaching audiences across web, mobile and connected TV.
BrightRoll powers digital video advertising for the world’s largest brands and agencies, including 87 of the AdAge Top 100 US advertisers, all of the top 15 advertising agencies, and all 10 of the leading demand-side platforms
BrightRoll served more video ads and reached more consumers in the US in 2014 than any other platform, according to comScore
Tens of thousands of sites and apps send approximately two billion requests per day to BrightRoll to monetize the inventory they worked hard to create
BrightRoll is a large, growing and profitable business with net revenues expected to exceed $100 million this year. I’ve spent time with Tod Sacerdoti and his leadership team and I cannot wait to have him, his vision, and his team here at Yahoo.
I’ve talked on our earnings call about the transformation to return our iconic company to greatness. This acquisition is an important step in that transformation and has been accomplished in a strategically and financially compelling way. I’m confident it will create shareholder value, especially since we expect it to enhance EBITDA.
At the same time, this acquisition in no way detracts from our commitment to being a good steward of capital, continuing our track record of returning excess capital to shareholders and exploring smart, tax-efficient solutions for our stake in Alibaba. We continue to be optimistic about our progress on those efforts, and we will be back to you with an update by our next earnings release.
In the meantime, please help me welcome Tod and the BrightRoll team to Yahoo!
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