AOL closes $90m deal for content personalisation specialist Gravity

AOL has acquired personalisation specialist Gravity in a deal worth over $90 million [£54 million] and one that lets AOL focus its publishing network ever further.

Gravity’s technology helps to create visualisations based on user preferences online and will allow editorial and advertising content to be targeted at specific users more easily than at present.

“The web is moving to the era of personal, and a personal web filter will reshape how consumers get information and services,” said AOL Chairman and CEO Tim Armstrong. “Gravity is joining AOL to lead the personalization transformation of AOL's brands and platform partners.”

AOL will gain access to Gravity’s client base of publishers and brands that includes Sony, Intel, USA Today and GAP as well as many more. Gravity launched its API last year and since then there have been over one billion personalised page views per month on some of the publisher sites it works with and its technology has led to a 240 per cent uplift in engagement compared to sites that don’t have the personalisation.

The transaction will also see Luke Beatty promoted to head of product for AOL’s brand group that oversees AOL’s content operations and means that Gravity’s team will report to him.

Gravity was founded back in 2009 by former MySpace employees Amit Kapur, Jim Benedetto, and Steve Pearman, and their expressed aim was to “personalise the Internet” through the use of applications.

The closing purchase price for the deal is $83 million [£50 million] with an additional $7.7 million [£4.6 million] of the amount being deferred and paid over two years following completion. As part of the deal AOL acquires around $12 million [£7.2 million] in net operating losses that will result in an expected future cash benefit of $5 million [£3 million] and the deal will close in the current quarter.