Google close to $400M Admeld buy

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Google is close to acquiring display advertising company Admeld for $400 million, according to numerous news reports.

Admeld produces a real-time bidding platform that helps online publishers sell display ads. The company's clients include Fox News, Hearst Television, The Weather Channel and Answers.com.

Katelin Todhunter-Gerberg, a Google spokesperson, said that the Mountain View, Calif., company does not “comment on rumor or speculation.” Admeld CEO Michael Barrett and chief revenue officer Benjamin Barokas did not return calls seeking comment.

The acquisition would be a “momentous step for Google,” said Karsten Weide, research VP of digital media and entertainment at market intelligence firm IDC.

“With the acquisition, [Google would offer] the complete value chain in the advertising ecosystem,” he said. Weide added that the acquisition would improve ROI for Google's advertising customers because it “gives them easier access to relevant inventory,” as well as Admeld inventory that they otherwise wouldn't be able to take advantage of.

Google's share of overall display advertising revenue increased to 14.7% in the first quarter, overtaking Yahoo as the market's leader in share, according to a May 2011 report from IDC.

Weide said that the acquisition would also increase Google's lead over its major competitors because none “have that kind of access to relevant publisher inventory.”

The Wall Street Journal reported that Google and Admeld have discussed the acquisition since January. According to a February article from Silicon Alley Insider, Google had previously tried to acquire Admeld for $150 million to $200 million, but Admeld held out for a larger sum.

Neal Mohan, VP of product management at Google, said June 9 that he expects display ad spending to hit $200 billion in “a few short years” and emphasized the value of real-time bidding.

“Some of our case studies have shown that through things like data-driven, real-time buying, click-through rates have improved 135% and conversion rates have gone up 150%, and most importantly, cost-per-action is down 125%,” he said, speaking at the Interactive Advertising Bureau's “The Future of Display” event.

TechCrunch first reported news of the acquisition on June 9.

Update: Neal Mohan, VP of display advertising at Google, confirmed in a company blog post on June 13 that the company has agreed to acquire Admeld.

“By combining Admeld's services, expertise and technology with Google's offerings, we're investing in what we hope will be an improved era of flexible ad management tools for major publishers,” said Mohan, in the blog post. “Together with Admeld, we hope to make display advertising simpler, more efficient and more valuable, provide improved support and services, and enable publishers to make more informed decisions across all their ad space.”

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