AOL (AOL) Acquires Gravity for $83M

NEW YORK (TheStreet) -- AOL  (AOL) announced it had reached a deal to acquire Gravity, a Web content personalization company, for $83 million.

Shares of AOL fell 0.55% to $49 on Thursday. 

According to the agreement, $7.7 million will be deferred and paid over the course of two years once the deal is finalized, which should take place in the first quarter of 2014. AOL also announced that it would take on about$12 million in net operating losses, which could yield a future cash tax benefit of approximately $5 million.

Gravity's technology uses graphs that map out a person's interests, preferences, habits and more and then lets companies provide personalized content, both editorial and advertising, to the user.

"The Web is moving to the era of personal, and a personal web filter will reshape how consumers get information and services," said AOL Chairman and CEO Tim Armstrong in a company statement. "Gravity is joining AOL to lead the personalization transformation of AOL's brands and platform partners."

TheStreet Ratings team rates AOL INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about its recommendation:

"We rate AOL INC (AOL) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

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