Yahoo splashes out $640m on video service

American internet corporation Yahoo has confirmed the purchase of digital video ad service BrightRoll for $640 million (£402 million).

The acquisition is a move to reinforce the company’s video business content that has been in the centre of digital advertiser’s interest, besides mobile, social and native ads.

As Yahoo boss Marissa Mayer said on Tumblr (another Yahoo-owned service), “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.

“Acquiring BrightRoll will dramatically strengthen Yahoo’s video advertising platform, making it the largest in the US,” she added.

Yahoo has already made approximately 30 acquisitions, only to shut several of the projects down, but BrightRoll won’t suffer the same fate as, like Tumblr, it will continue to work independently.

It is already a profitable company and Yahoo’s CEO believes it will bring in significant revenue, “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,” said Mayer.

This is Yahoo’s first major purchase since it sold a part of its stake in Chinese e-commerce giant Alibaba for $9.4 billion (£5.9 billion) back in September.