Audio streaming service Spotify (SPOT) - Get Spotify Technology SA Report definitively agreed to buy podcast advertising platform Megaphone for $235 million, the latest in a series of podcast-related deals in recent months.
Shares of the New York company at last check were down 6% to $257.77.
The closing of the transaction is subject to regulatory clearances.
Megaphone would be part of Spotify's effort to help advertisers and podcast publishers quickly make money off podcasts, "powered by a scaled audience and state-of-the-art technology," Spotify's chief content and advertising business officer, Dawn Ostroff, said in a statement.
Megaphone, Reston, Va., was founded by the online magazine Slate. Both are units of closely held Graham Holdings, (GHC) - Get Graham Holdings Co. Report the Arlington, Va., provider of education and media services.
Shares of Graham Holdings at last check rose 4.1% to $453.19.
The podcast technology at Megaphone provides hosting and ad-insertion capabilities for publishers and targeted ad sales for brand partners.
The acquisition follows Spotify’s launch of Streaming Ad Insertion, a technology platform that delivers traditional podcast ads.
And in June Spotify unveiled a multiyear partnership with AT&T's (T) - Get AT&T Inc. Report Warner Bros. and DC Entertainment. Under the terms Spotify will get first-look rights to original scripted narrative DC podcasts based on such characters as Superman, Batman, Wonder Woman and the Joker.
For the third quarter, Spotify posted a net loss of €101 million, or €0.58 a share, vs. net income of €241 million, or €0.36 a share, a year earlier.
Ad-supported revenue grew 9% year over year, coming in at €185 million, ahead of the company's forecasts, "exhibiting a return to growth following the impact of the global pandemic," Spotify said.
In February, Spotify bought sports and lifestyle company The Ringer for $250 million.
Podcasts generated $708.1 million in advertising sales in the U.S. last year, according to the Interactive Advertising Bureau. That number has grown every year and should surpass $1 billion within the next year or two.
As for other podcast deals:
Late last month radio-station operator IHeartMedia said (IHRT) - Get iHeartMedia, Inc. Class A Report it would acquire Voxnest, operator of a marketplace and provider of data and publishing tools for podcasts.
And in July, Sirius XM (SIRI) - Get Sirius XM Holdings, Inc. Report said it would pay $325 million for an E.W. Scripps (SSP) - Get E. W. Scripps Company Class A Report podcast production company, Stitcher, that includes, among other luminaries, Oprah Winfrey's network.