Paving the way for other big mergers. Time
AT&T is acquiring advertising tech company AppNexus, a move to help it jumpstart future video services with more focused ads.
The media giant, which two weeks ago closed its $85.4 billion deal for Time Warner, reportedly paid $1.6 billion for the New York-headquartered firm.
AppNexus will become part of AT&T’s advertising and analytics business, a division formed a year ago to evolve the company’s digital TV advertising delivery.
“Ad tech unites real-time analytics and technology with our premium TV and video content,” said Brian Lesser, CEO of the AT&T’s ad and analytic’s business, in a statement. “The combination of AT&T advertising & analytics and AppNexus will help deliver a world-class advertising platform that provides brands and publishers a new and innovative way to reach consumers in the marketplace today.”
Terms for the transaction, expected to close during the third quarter of 2018, were not disclosed. But The Wall Street Journal reported the transaction’s value, according to persons familiar with the situation, along with rumors about the deal last week.
AT&T owns DirecTV, which it acquired in 2014 for $48.5 billion, and launched DirecTV Now, a streaming subscription TV service two years later. With its acquisition of Time Warner, AT&T now owns CNN, Turner networks TBS, TNT and TruTV, HBO, Cinemax and the Warner Bros. TV and film studio (The Voice, Ready Player One).
AppNexus, which has offices in 26 countries, has a digital ad platform, which can deliver real-time ads to viewers of AT&T’s video offerings, such as the new WatchTV service launching this week. WatchTV is an ad-supported video service, with more than 30 channels, provided free for subscribers to two new AT&T unlimited plans. Others can pay $15 monthly for WatchTV.
By improving its personalized ads delivered to streaming video viewers, AT&T expects to be able to create more, economical video packages for consumers. “Combining AT&T’s incredible assets with our technology, we will help brands and marketers power new advertising experiences for consumers. It’s what the market is asking for, and together we’re poised to deliver it,” said Brian O’Kelley, CEO of AppNexus, who co-founded the company in 2007.
Investors in the company, which had filed for an initial public offering in 2016, include Microsoft, News Corp., Marc Andreessen and Ben Horowitz.
More: Cord-cutting isn’t just happening, it could be escalating
More: AT&T can proceed with $85 billion bid for Time Warner, judge rules, paving way for landmark deal
Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider.