Rumours are circulating that AOL, now owned by telecommunications firm Verizon, is looking to enter the mobile ad business in a big way by purchasing Millennial Media.
The $300 million buyout reported by TechCrunch would be significant for a number of reasons.
AOL made $279.8 million from its digital ad platform business in the first quarter of this year, up 21% from 2014, as huge strides were made in areas like search and programmatic.
With Verizon now pulling the strings following its $4.4 billion purchase of AOL in May of this year, many had predicted the firm to move closer to the mobile space, and this theory could add weight to the Millennial rumours.
Whether or not Millennial would continue to operate as a standalone platform like several of AOL’s tech buys is another matter. The prospective inductee’s Q1 financial report went the opposite way to AOL’s with revenue dropping from $72.6 million in 2014 to $63.2 million - a 13% decline.
The group reported a net loss of $19.8 million throughout the same period, a year after recording a $12.9 million drop in Q1 2014.
But with the company also announcing an intention to build on its programmatic exchange - a key area of focus for AOL, a deal may see the media giant get its hands on a sizeable amount of tech.
A deal in the works
AOL is yet to confirm or dispel the rumours, and Millennial has not responded to PerformanceIN’s request to comment. However, analysts are already beginning to spell out what a potential deal would mean.
Verizon’s purchase of AOL earlier this year was touted as a way of the telecoms provider making better use of its data and sizeable mobile audience.
Millennial Media offers a range of solutions for advertisers, the most notable being a programmatic marketplace built solely for reaching mobile users via apps and websites which processes over nine billion requests for inventory per day.
The group also offers solutions for measuring what these do, in terms of conversions and other metrics pre-set by the campaign managers.
Despite Millennial’s recent losses, revenue from these solutions certainly hasn’t been bad for the firm.
In the full year 2014, the company’s overall taking was $296.2 million, up from $259.2 million in 2013. But an annual loss of $149 million told the tale of a post-IPO Millennial, which has lost nearly 90% of its $2 billion valuation since going public on the New York Stock Exchange in 2012.
It’s possible that AOL will be looking to acquire Millennial for its assets, which would add increased mobile capabilities to its existing ad stack.