AOL Acquires Broadband Video Advertising Company, Lightningcast

AOL has acquired Lightningcast, a privately held company that specializes in broadband video advertising. Financial terms of the deal have not been disclosed. The deal will see Lightningcast operating as a wholly owned subsidiary of AOL-subsidiary, Advertising.com: it will retain its current CEO, Tom MacIsaac, and its 34 employees (note: all three companies are located close to one another--Lightningcast is based in Washington, DC; Advertising.com is based in Baltimore, MD; and AOL is based in Sterling, VA). Lightningcast offers solutions for placing ads in on-demand, live and downloaded Web video: those solutions enable, among other things, advertising insertion, campaign management and reporting (among other things, Lightningcast gives its customers the option of making their ads unskippable). Earlier this year, it launched its "InStream" video advertising network, which was designed to allow it to expand its role in providing managed insertion of streaming media advertising and reporting by becoming a direct seller of streaming media inventory to advertisers. "This acquisition will provide a huge infusion of talent, technology, and publisher relationships for Advertising.com at a time when streaming video is growing at a blistering pace," Mike Kelly, president of AOL Media Networks, said in a prepared statement. "When we looked at the video ad market we identified and pursued the clear leader--Lightningcast. This acquisition will allow AOL and Advertising.com to continue to create cutting-edge ad solutions, own and further develop the leading strategic advertising platform, and set the course for the future of online video. The acquisition of Lightningcast is also an important component in furthering AOL's established leadership as the premier destination for video on the Web." (Note: recent moves by AOL in the broadband video space include the acquisition of video search company, Truveo, and the launch of a broadband TV service, In2TV.)

According to AOL, Lightningcast has strong relationships with a diverse base of online publishers, including several well-known companies that license its technology for use on their own Web sites. AOL itself is, in fact a customer: since 2002, it has used Lightningcast's platform first for audio advertising and then for video streaming advertising; among other things, the platform supports advertising on its In2TV service (note: other Lightningcast customers include Disney-ABC, Microsoft and MTV). AOL says that it will merge Lightningcast's streaming media technology and advertising network operations under Advertising.com within its AOL Audience business unit. Advertising.com's recently launched pre-roll video network and Lightningcast's InStream network will be merged, and will operate under the InStream brand. According to AOL, the combined network will comprise 300 Web sites and 175 million monthly streams, and will allow advertisers to target video campaigns by behavior, demographic, content channel and other criteria. The company says that the Lightningcast acquisition will support Advertising.com's efforts to provide advertisers with a centralized resource for their online marketing needs. In addition to offering Web, search and behavioral marketing solutions, AOL says, Advertising.com offers a centralized network for the delivery of automated rich media campaigns, including floating, auto-expandable and sound-enabled creatives: the company claims that the InStream network and Advertising.com's rich media network simplify the planning, buying and execution processes for these ad formats. AOL says that Lightningcast's existing InStream sales force will continue to focus exclusively on video, and will work closely with the Advertising.com sales team. It also says that Lightningcast will continue to work to expand its third-party video ad-serving business.

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