Opera confirmed that it has acquired US Mobile Video Ad platform, Adcolony to strengthen its position in the fast growing mobile advertising industry, with a combined consumer audience of more than 700 million. The deal amount is USD 75 million in cash, plus potential earn-out payment of USD 275 million that brings the deal up to USD 350 million. This acquisition is expected to close in the third quarter of 2014.
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Post Acquisition: For Publishers, this acquisition will offer the world a better mobile-focused ad server along with a wide scope of managed, self-service and programmatic tools. Also, it will create different ways to monetize their inventory effectively.
For Advertisers, the combination of both companies is expected to provide a comprehensive suite of brand and performance-based mobile ad solutions, delivering creative, targeting, analytics, measurement, programmatic buying, and video and rich-media offerings.
Adcolony was launched in 2011 by Founder & President Jonathan Zweig. The company is known for providing full-screen quality video ads through its Instant-Play™ technology for brands and apps. Earlier it had raised an undisclosed amount of funding from Insight Venture Partners.
It works with both Fortune 500 brands and more than half of the top grossing publishers in the App Store and having offices in Los Angeles, San Francisco, Seattle and New York.
“Opera is growing rapidly and we are constantly looking for opportunities to bring best-of-breed services to the market,” said Lars Boilesen, CEO, Opera Software, in a statement. “AdColony is a natural fit for Opera and our mobile advertising subsidiary, Opera Mediaworks. This acquisition will augment our services with a robust specialization around mobile video – the fastest growing segment within the mobile advertising industry.”
Tech Crunch says: The deal will bring together one of the bigger startups in mobile video ads (that’s AdColony) with Opera, a company that has built a business in web browsers for mobile handsets, PCs, and TVs. Opera is an alternative to the likes of Google’s Chrome and Apple’s Safari, as it’s a portal to search for apps.
On mobile devices, one of Opera’s main selling points is its compression algorithms that the company promises give faster download speeds that use up less data, and therefore cost less to use.
More from WSJ Blog: There are no shortage of ad networks and brokers offering access to mobile video ads. But AdColony says its major selling point is its “low-latency” ad serving technology. In other words, it’s figured out a way to load video ads quickly, which is especially important when delivering them to mobile devices with relatively slow connections.
“We’ve focussed on eliminating the pain points of mobile advertising,” said AdColony CEO Will Kassoy, who will now additionally take on the role of Chief Marketing Officer of Opera Mediaworks.
Following the acquisition AdColony will operate as a subsidiary of Opera Mediaworks and continue to serve its existing customers, which include both mobile app publishers and major ad agencies.
NDTV Gadgets says: Under the brand name Opera Mediaworks, the company has grown rapidly by acquiring firms like AdMarvel, Mobile Theory and 4th screen. It added German startup Apprupt to the list earlier this year and has said it planned to add more.
The Norwegian firm also said on Tuesday it was raising its 2014 full year revenue forecast range to $435-$460 million from $390-410 million previously, and its adjusted EBITDA range to $110-120 million from $108-116 million, assuming that the transaction will be closed by August 2015.
Spending on mobile advertising is expected to grow to $41.9 billion by 2017, with mobile video advertising showing the highest growth rate, Opera said, citing Gartner research.
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