AOL to acquire Tacoda behavioral marketing network

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AOL has entered into a definitive agreement to acquire online behavioral targeting advertising network Tacoda in a move to upgrade its targeted advertising.

The deal, whose financial terms were not disclosed, is subject to customary closing conditions and regulatory approvals. Being a venture capital-financed firm, Tacoda had been planning to either sell the firm or go public.

"It is a great time and we got a great price, and most importantly it was a great platform," said Dave Morgan, founder/chairman of Tacoda, New York. "The time to attack online behavioral advertising is now and we weren't big enough to do it on our own."

Tacoda will continue to operate as a wholly owned subsidiary of AOL. The behavioral targeting firm, which was founded in 2001, specializes in advanced technology that lets advertisers serve highly relevant ads based on consumers' online behaviors. Using Tacoda's technology, AOL will be able to extend its targeting capabilities to advertisers and publishers and extend the reach of its third-party display network.

Other recent corporate acquisitions by AOL in 2007 include Third Screen Media, a mobile advertising network; and AdTech AG, a software provider and international online ad-serving company based in Frankfurt, Germany. In 2006, AOL acquired Lightningcast, a video advertising firm, and in 2004, it bought Advertising.com, which operates the largest third-party display network.

"AOL has a great track record with acquisitions of firms like Advertising.com," Morgan said. "They left it independent, but helped it grow significantly, as they plan to do with us."

Morgan thinks that the online advertising market is heading more and more in the direction of behavioral marketing.

"It has just been exploding recently, and I expect it to grow since it has been delivering strong results to advertisers," he remarked. "I am happy to be a part of AOL while this is happening."

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