AT&T in Talks to Acquire AppNexus for About $1.6 Billion
June 19 2018 - 11:43PM
Dow Jones News
By Benjamin Mullin and Drew FitzGerald
AT&T Inc. is in talks to acquire advertising technology
company AppNexus, according to people familiar with the matter, a
deal that would give the telecom giant a foothold in digital ad
sales as it seeks to become a challenger to Alphabet Inc.'s Google
and Facebook Inc.
AT&T is expected to pay around $1.6 billion, the people
said. AppNexus, which is backed by investors including ad giant WPP
PLC, investment firm TCV and Wall Street Journal parent News Corp,
was valued at $1.8 billion in a 2015 funding round.
The company filed confidentially for an initial public offering
in 2016 but has held off amid an unforgiving climate for public
offerings.
Acquiring AppNexus would advance AT&T's ambitions to build a
robust advertising business. AppNexus operates one of the largest
online ad exchanges, automated marketplaces that allow advertisers
to buy space across thousands of websites, targeting their desired
audiences.
Cheddar earlier reported the AT&T talks with
AppNexus.
Already, AT&T's DirecTV unit sells TV ads. The company's
recent acquisition of Time Warner Inc. -- renamed WarnerMedia --
will give it access to much more TV ad space from channels like
TNT, TBS and CNN.
AT&T believes it can appeal to advertisers by allowing
granular targeting of TV ads to households with certain
characteristics using its huge amount of data on wireless customers
to target ads and measure whether they are effective. The company
last summer brought in a top executive from WPP, Brian Lesser, to
run its advertising and analytics business.
With an acquisition of
AppNexus, AT&T would move deeper into the digital ad realm.
But it would remain a relatively small player compared to the
giants, Google and Facebook, which together are expected to have
56.8% of the U.S. digital ad market this year, according to
eMarketer.
While some ad tech firms work only for publishers, helping them
manage ad space on their sites, or ad buyers, helping agencies
purchase ads, AppNexus is in both lines of business.
The company's chief executive, Brian O'Kelley, is an ad tech
veteran. He is credited with building one of the first ad
exchanges, Right Media, which he eventually sold to Yahoo in
2007.
AT&T's main rival, Verizon Communications Inc., already is a
player in online advertising after its 2015 purchase of AOL for
$4.4 billion. Verizon purchased the digital assets of Yahoo in 2016
for $4.83 billion and merged them with AOL to create a new company
called Oath.
"By all rights, the carriers really should be the next big
mobile media players," said Jon Jackson, founder and chief
executive of Mobile Posse, a mobile advertising technology company.
"They have over a hundred million subscribers unlocking their
AT&T phones 120 times a day, they're in a great position. But
first they need to sort out how they get content in front of their
subscribers and next sort out how to plug in mobile
advertising."
Write to Drew FitzGerald at andrew.fitzgerald@wsj.com
(END) Dow Jones Newswires
June 19, 2018 23:28 ET (03:28 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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