Yahoo is buying digital video advertising service BrightRoll for $640 million in the Internet company’s latest attempt to boost its revenue after years filled mostly with financial futility.
The acquisition announced Tuesday marks Yahoo’s first major purchase since reaping a $9.4 billion windfall in September by selling part of its stake in a rapidly rising Internet star, Chinese e-commerce service Alibaba Group Holding Ltd.
Yahoo Inc. has promised to distribute at least half of the $6.3 billion in after-tax proceeds from the Alibaba stake sale to its shareholders. That gives CEO Marissa Mayer the option of spending the rest on acquisitions that could enable the Sunnyvale, California, company to recover some of the ground that it has lost to rivals Google Inc. and Facebook Inc. in the booming online ad market.
BrightRoll, based in San Francisco, helps to automatically place ads in videos displayed on personal computers and mobile devices. Since its founding in 2006, it has built relationships with most of the biggest advertisers in the U.S., helping the service generate more than $100 million in annual revenue, according to Yahoo.