AOL Pay $405 Mil Video-Ad Startup

Promising make buying Internet video advertising easier — and more TV-like — AOL announced a pact to acquire, which operates a global online video advertising platform, for $405 million in cash and stock.

The “programmatic” platform provides buyers and sellers with automated tools to plan, buy and measure across linear TV and online video, In 2012, helped execute more than 26,000 global ad campaigns on behalf of brands, agencies and publishers, which ran on about 9,500 websites.

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This year AOL has planned to triple its investment in original video programming, with plans to bow 15 Internet shows this year. Meanwhile, company has been shutting down underperforming areas of the business, such as its music-related websites.

The acquisition is the biggest deal by AOL chairman and CEO Tim Armstrong, a former Google exec who joined AOL in 2009. AOL paid $315 for Huffington Post in 2011.

“AOL is a leader in online video and the combination of AOL and will create the leading video platform in the industry,” AOL chairman and CEO  Tim Armstrong said in announcing the deal. “The founders and team are on a mission to make advertising as easy as e-commerce and the two companies together will aggressively pursue that vision.” will operate as part of AOL’s video organization which is led by Ran Harnevo, senior veep of video, and be included as part of the overall solution offered by AOL Networks to publisher and advertiser partners.

AOL’s offer for comprises $322 million in cash and approximately $83 million in AOL common stock, subject to certain adjustments. Subject to closing conditions, AOL expects to close the acquisition in the third quarter of 2013.

San Mateo, Calif.-based is backed by Bessemer Venture Partners, Gemini Israel Funds, Redpoint Ventures and Spark Capital.

Separately, AOL reported second quarter financial results. Revenue increased 2% to $541.3 million. AOL’s net income for the period was $28.5 million versus $970.8 million in Q2 2012; the year-ago period included $1 billion from Microsoft, which bought 800 patents from AOL.

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