ADOTAS – Back in September the rumor mill went wild with speculation that publisher-side platform the Rubicon Project was fixing to buy News Corp’s Fox Audience Network, which seemed stuck in limbo after being spun off into MySpace following the departure of CEO and co-creator Adam Bain (now Twitter’s president of revenue). Though the whispers settled down, last week they got stronger before Rubicon’s official announcement this morning.
CEO and Founder Frank Addante said that FAN’s technology assets — including its real-time bidding algorithms, MyAds self-service ad-buying platform and audience hypertargeting and insights — will enable the company to reach its goal of becoming an end-to-end display advertising platform geared at publishers 18 to 24 months ahead of schedule.
John Carnahan, formerly CTO and EVP of FAN Product, Technology and Operations, will become Rubicon’s new CTO. Also joining Rubicon’s staff are 100 FAN employees, including a healthy deployment of engineers. Not included in the deal are FAN’s third-party ad network, which will likely stay in the hands of MySpace, and the direct ad sales team, which was reportedly laid off last week. News Corp. is also gaining a non-controlling minority equity stake in the combined entity.
Rajeev Goel, CEO of revenue optimizer and Rubicon competitor PubMatic, reiterated his opinion that the deal “smacks of desperation” (he previously called it a “Hail Mary pass”) and argued that Rubicon will have a difficult time innovating while painfully integrating FAN’s technology.
“This is a huge gamble on Rubicon’s part to try and catch up with the technology leaders in the space and it will be at least a year before anyone will know if the deal was even worth it,” he said.
However, Rubicon had more sunny news to go around — News Corp. joined investors Clearstone Venture Partners, IDG Ventures Asia, Mayfield Fund, NBC Universal’s Peacock Equity Fund and Jarl Mohn in an $18 million round of funding, bring Rubicon’s investment total to $60 million.
The company, which expects $100 million in revenue this year, also noted that it reached profitability in October 2010, and is averaging 60 billion ad transactions each month. Rubicon believes it will process 500 billion real-time bidding transactions in the fourth quarter. The company also acquired SiteScout earlier this year to provide clients protection from malware.