Google is reportedly on the verge of buying online advertising technology company AdMeld. for about $400m, according to media reports.
The New York Times cites ‘three people briefed on the negotiations that Google is willing to pay $400m for US-based Admeld’s technology and customers.
An acquisition of AdMeld would boost Google’s display advertising business, which currently makes up less than 3% of its annual $30bn reveneue.
AdMeld, known as a “supply-side platform” company, gives web publishers access to advertising from hundreds of sources, such as ad networks, and sell display ads in real time. The company provides “ad optimization”, offering technology that helps publishers decide which ads to accept from ad networks or buyers participating in exchanges.
The acquisition of AdMeld is seen as enabling Google to obtain ad inventory from some of the top publishers of online content, who allow AdMeld to manage lower-priced inventory that they are not able to sell themselves. The inventory would allow Google to add optimization functionality to its ad server, DoubleClick. Google had last year acquired Invite Media, a “demand-side platform”, which allows advertisers to buy ads through exchanges such as Google’s.
Google generated nearly $30 billion in revenue in 2010, with a major portion of the revenue being generated from selling ads on its search engine. The company has said that advertising revenues made up 97 percent of its revenues for the quarter ended March 31, 2011. In October 2010, Google said its display-ad business was generating revenue at an annualized run rate of $2.5 billion.
New York-based AdMeld was founded in 2007 and is run by CEO Michael Barrett, who formerly led global sales at Fox Interactive Media. The company’s customers include News Corp.’s (NWS) Fox News, Hearst Television, Discovery Communications, and The Weather Channel. Admeld’s competitors are Palo Alto-based PubMatic and Los Angeles-based Rubicon Project.
AdMeld is reportedly backed by $30 million in funding reportedly from investors including the Foundry Group, Spark Capital, Norwest Venture Partners and Time Warner Investments.