The Buzz: TechCrunch says AOL/Verizon is making a mobile ad push by looking to buy Millennial Media for around $300M.
What We Know: Millennial has lost nearly 90% percent of its valuation since going public; it was trading at $1.45 per share as of market close yesterday, giving it a market capitalization of $217 million. Today, with the rumors the stock jumped up 30%.
*Millennial Media sells mobile ads across numerous websites and apps; they claim to reach more than 670 million unique users a month globally with the potential to deliver ads to more than 65,000 apps.
Neither AOL or Millennial Media are commenting on the (pretty reliable) rumor that AOL is in the process of buying the mobile ad network. TechCrunch quotes an anonymous source as saying:“Millennial has a bunch of good assets and some legacy bad assets.They’ve been prepped for sale for some time.”
Why Would AOL/Verizon Want Millennial Media? Because mobile advertising is where the growth is: The mobile ad market is forecast to be worth $100 billion in 2016 and 51% of the digital ad market, according to eMarketer.
AOL’s purchase of Millennial is an effort to continue building its digital ads business–for its own brands, including TechCrunch, Huffington Post, Engadget, etc. and for third-party publishers. In addition, AOL/Verizon recently made a deal to take over display, video and mobile advertising for Microsoft’s operations in the United States, the United Kingdom, Canada, Brazil, France, Germany, Italy, Spain, and Japan, covering ad inventory on properties like the MSN Homepage, Outlook Mail, Xbox, Skype and ads in apps. That increased activity could also be a reason why AOL would want to ramp up its business with Millennial Media’s ad network.
Stay Tuned. You can bet the story isn’t over yet.