AOL Buys Adap.tv for $405 Million, Bets The Bank On Video Advertising

 
 
 

AOL has purchased Adap.tv for $405 million, according to Business Insider.

The acquisition is a smart move with bad timing (in terms of company morale), based on last week’s layoffs across HR, AIM and video production. Adap.tv, however, has potential to be a huge honeypot for the ad-serving division, AOL Networks, as video continues to demand a high premium for ad-revenue.

CEO Tim Armstrong has led AOL to profitability, albeit with some major growing pains; Business Insider points out that AOL only had about $470 million in outstanding capital to spend before this acquisition, meaning that Armstrong risked about 85% of the current business on Adap.tv’s continued growth.

To his credit, Armstrong has managed to stay out of the way of his other 9-figure purchase, The Huffington Post, although it’s unclear if that was a business decision or a simple desire to not be eaten alive by Arianna Huffington.