UPDATE: AOL Makes It Personal with Agreement to Acquire Gravity for ~$83M
AOL (NYSE: AOL) today announced it has entered into an agreement to acquire Gravity, a leading company in multi-screen content optimization and personalization and the company that created the Interest Graph.
Gravity personalizes the Internet beyond search and social by applying a personal and real-time filter to the ever-growing volume of digital information available for consumption. Gravity's patented technology creates Interest Graphs based on individuals' interests, preferences and habits and allows publishers to offer a tailored and relevant selection of editorial and advertising content to readers.
Gravity's technology will act as an accelerator in virtually all areas of AOL's strategy to create more engaging, relevant and valuable experiences for its consumers, advertisers and publisher partners.
The combination of AOL and Gravity will:
Advance AOL's ability to distribute relevant and engaging content and advertising across the Internet through intelligent technology; Personalize and make more engaging AOL's portfolio of brands for consumers through the delivery of relevant content in real-time across all devices; Enable AOL's publisher network of more than 2,000 partners to deliver personalized and relevant content recommendations and branded content to each of its users; Allow AOL's current and prospective advertisers to deliver relevant branded content to consumers based on their specific interests where and when they are most engaged; Enhance the performance of AOL's programmatic platform with improved analytics and targeting; Further strengthen AOL's technology infrastructure by supplying relevant and engaging content and ad experiences in all formats and across all screens in real-time; Add Gravity's highly talented executive team as well as a team of engineers with expertise in content optimization and data science to the AOL ranks. “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. “Gravity is joining AOL to lead the personalization transformation of AOL's brands and platform partners.”
"Every day we're presented with an overwhelming amount of information to consume on our favorite websites and apps," said Gravity CEO Amit Kapur. "It's time to move beyond searching for the best content to having the best content search for you. We believe that by combining AOL's vast brand, publisher and advertiser network with Gravity's interest graph technology, we can do just that."
Gravity will bring to AOL a client base of top publishers and brands such as Sony, Intel, USA Today and GAP. Since the launch of the Gravity API last year, there have been more than one billion personalized page views per month on some of the biggest publisher sites on the web, and its technology has increased engagement by 240% compared to sites that do not have personalization.
After closing, the Gravity product and team will report to AOL Brand Group Head of Product, Luke Beatty.
AOL has agreed to acquire Gravity for a closing purchase price of approximately $83 million. An additional $7.7 million of consideration will be deferred and paid over two years following closing. As part of the transaction, AOL will acquire approximately $12 million of net operating losses, which is expected to result in a future cash tax benefit to AOL of approximately $5 million. AOL expects the acquisition to close in the first quarter of 2014.
AOL Inc. (NYSE: AOL) is a brand company, committed to continuously innovating, growing, and investing in brands and experiences that inform, entertain, and connect the world. The home of a world-class collection of premium brands, AOL creates original content that engages audiences on a local and global scale. We help marketers connect with these audiences through effective and engaging digital advertising solutions.
Founded in 2009 by early-on MySpacers Amit Kapur, Jim Benedetto, and Steve Pearman, Gravity aims to personalize the Internet. Through our applications, Gravity understands people's interests so that our partners can create more relevant experiences for their users. Our goal is to build a smarter internet that helps people sift through the overwhelming amount of information on the web, while delivering a serendipitous experience that exposes them to the breadth and depth of the Internet.
Today, Gravity works with some of the largest, most well-known brands on the internet, and processes hundreds of millions of data points each day.
For more information, please visit Gravity.com and follow @Gravity on Twitter.
This release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, but are not limited to, statements regarding the anticipated benefits of the transaction, the expected closing date and other statements identified by words such as "may," "will," "intend," "estimate," "should," "expect" or similar expressions. These forward-looking statements are based on the current expectations and beliefs of AOL's management, and are subject to uncertainty and changes in circumstances, including, but not limited to, the approval of the transaction by antitrust authorities, the satisfaction of the closing conditions to the transaction, the competitiveness and quality of our combined offerings and significant competition in the internet advertising industries generally, our ability to timely and successfully integrate Gravity's operations into our operations, our ability to retain, hire and develop skilled employees and the parties' performance of their obligations under the agreements. Any forward-looking information is not a guarantee of future performance and actual results may vary materially from those expressed or implied by the statements herein, due to changes in economic, business, competitive, technological, strategic and/or regulatory factors, as well as factors affecting Gravity's and AOL's operations and businesses. More detailed information about these factors as they relate to AOL may be found in the section entitled "Risk Factors" in AOL's Annual Report on Form 10-K for the year ended December 31, 2012 and in AOL's Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 filed with the SEC. AOL is under no obligation to, and expressly disclaims any obligation to, update or alter the forward-looking statements contained in this release, whether as a result of new information, future events or otherwise
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