Facebook will acquire LiveRail, a video-advertising technology company, as the social giant looks to dramatically expand its video advertising business.

Terms of the deal were not disclosed. Facebook is paying between $400 million and $500 million for LiveRail, TechCrunch reported. Customers of LiveRail, founded in 2007, include Major League Baseball, CBS Interactive, ABC Family, A+E Networks, Gannett, Dailymotion and Songza. The company claims it delivers more than 7 billion ad impressions monthly.

“We believe that LiveRail, Facebook and the premium publishers it serves have an opportunity to make video ads better and more relevant for the hundreds of millions of people who watch digital video every month,” Brian Boland, Facebook’s VP of ads product marketing, said in announcing the deal.

SEE ALSO: NBC Is First TV Network to Buy Facebook Video Ads

LiveRail operates a real-time bidding advertising system, designed to let digital-video publishers place ads in a “programmatic” fashion based on multiple criteria at the optimal price.

Facebook — which touts its base of 150 million daily active U.S. users as offering greater reach than TV — launched its Premium Video Ads service with a test last December for Summit Entertainment’s “Divergent” and opened it up to a select group of marketers this spring. In May, NBC became the first TV network to use the Facebook autoplay video ads to promote three midseason shows: “Rosemary’s Baby,” “The Night Shift” and “Undateable.”

LiveRail, based in San Francisco, has 170 employees. The company’s main investor is venture-capital firm Pond Ventures.

“We believe that LiveRail’s excellent product — known in the industry as a video supply-side platform or SSP — and Facebook’s expertise with relevancy, delivery and measurement will help us make video advertising much better for everyone,” Boland said.

Companies that compete with LiveRail in the digital video ad market include BrightRoll, Tremor Video, TubeMogul and YuMe. In addition, Google recently announced a programmatic video ad exchange, Google Partner Select, designed to help video publishers sell inventory they don’t sell directly and let buyers access premium video, with Time Inc. as an initial partner.

According to BrightRoll founder and CEO Tod Sacerdoti, Facebook’s acquisition of LiveRail is a strong validation of the sector. “This is exciting news that reinforces the importance of video to marketers and publishers globally,” Sacerdoti said. “As brands and agencies invest more in sight, sound, and motion, buyers and sellers of digital media are realizing the need to have a dedicated video strategy in place.”

Separately, Facebook is in hot water over a 2012 test it conducted with 700,000 unsuspecting users, in which it altered the posts that appeared in their newsfeeds to gauge how emotional sentiment spread on the network. Facebook COO Sheryl Sandberg has apologized for the test, the Wall Street Journal reported. This week the U.K.’s Information Commissioner’s Office, which regulates data-privacy laws in the country, said it is investigating the experiment.

Facebook accounted for a 5.8% share of all global digital ad revenues in 2013, up from 4.1% the year prior, according to eMarketer. In the U.S. last year, the social service held 18.4% market share of digital display advertising, overtaking Google for the first time, according to the research firm.