Home AOL Acquires Behavioral Targeting Firm Tacoda

AOL Acquires Behavioral Targeting Firm Tacoda

In May AOL purchased a controlling stake in German ad-serving company AdTech AG to compliment Advertising.com, the ad network it purchased in 2004. Today, AOL announced the purchase of Tacoda, a behavioral targeting company founded in 2001. Reuters reports that this is a cash deal worth around $275 million, which is within the range given by other reports.

AOL’s most recent purchase continues a major consolidation trend in online advertising this year. Microsoft bought aQuantive for $6 billion, Google acquired DoubleClick for $3.1 billion (though faces FTC scrutiny), Yahoo! paid $680 million for Right Media, and WPP spent $649 million to purchase 24/7 Real Media.

AOL notes in their press release that eMarketer predicts an increase in the behavioral targeting market to $3.8 billion by 2011, from $350 million in 2006, which made Tacoda a prime target for a number of AOL competitors. AOL plans to integrate Tacoda with their current offerings (Advertising.com and AdTech). According to CEO Randy Falco, AOL is “quietly building on the strength of our ad network through these acquisitions.”

Brad Burnham, of Union Square Ventures, who was an early investor in Tacoda predicts, “the combination of TACODA‚Äôs seasoned management, technology, database, and experience with behavioral targeting and AOL Time Warner‚Äôs reach as a media company and (through Advertising .com) as an ad network, could become the foundation for creating the dominant display ad network on the internet.”

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