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Yahoo confirms $640M purchase of video ad startup BrightRoll

Marissa Meyer extends Yahoo's video advertising reach across websites, mobile devices -- and could reinvent banner ads in the process.


Yahoo is on an advertising roll with BrightRoll.

The web company announced Tuesday it had paid $640 million in cash for the San Francisco startup, which helps customers buy and sell video ads on websites, mobile devices and connected TVs. In a blog post confirming the acquisition Tuesday, Yahoo CEO Marissa Mayer predicted that BrightRoll ads could one day replace the ubiquitous Web banner ad.

"Video, along with mobile, social, and native, represents a new format of online advertising that has the potential to help us transform and modernize Yahoo's display business and return it to growth," Mayer wrote in her blog post.

Both video and mobile advertising have become key to Mayer's turnaround strategy. With BrightRoll, Yahoo gets a company that delivers video ads across channels without additional programming. That may help Yahoo grab more advertising dollars from rivals Google and Facebook. All three companies are facing pressure to boost revenue from mobile advertising. Mobile ads accounted for 62 percent of all revenue in the third quarter up from 41 percent from the year-ago period, she told analysts last month.

Digital video advertising is serious business. In the US alone, the market for web video ads will approach $6 billion by the end of 2014 -- a 56 percent leap -- and a value of almost $13 billion by 2018, said market research firm eMarketer.