SAN FRANCISCO (TheStreet) -- Yahoo (YHOO) is snapping up video advertising platform company BrightRoll in a $640 million cash deal, the company announced Tuesday. This acquisition is one that investors will particularly want to follow closely, given it could be key in turning around Yahoo's declining display advertising business.
Secondly, video is one of the four growth businesses that Yahoo is pegging its future fortunes on.
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"We say that video is display 2.0 because we believe it can reinvent and replace the branded banner advertisement. 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," said Yahoo CEO Marissa Mayer, in a blog post.
And Yahoo's display advertising business does need help. In the third quarter, Yahoo's display advertising revenue, excluding traffic acquisition costs, fell 6% to $396 million, compared with the same time last year. Driving this decline was a 24% drop in the price per ad, compared with year-ago figures.
"Video is display 2.0. It's what brand advertisers love. It's a format that elegantly and easily transitions from broadcast television to PC to mobile and even to wearables. This is why video is a key part of our strategy," Mayer also noted.