Opera
AdColony

Opera Is Buying Mobile Video Ad Network AdColony, Sources Say

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Opera Software is making another acquisition to build out its mobile advertising business: It has either purchased or is close to purchasing mobile video advertising startup AdColony, according to sources with knowledge of the companies.

We’ve contacted both companies asking for comment. Opera spokespeople in the U.S. and Europe have told us that the company will not comment on market rumors, and AdColony has not responded to requests for comment.

One source said that they’d last heard the negotiations were nearly complete. The other said the deal had closed at a price in the low hundreds of millions (up to $275 million). Now, we don’t want to downplay the difference between a deal that’s done and almost done, but for what it’s worth, the “not quite done” source did acknowledge that their information might be a little out-of-date, and that a completed deal would be consistent with the timing that they’d be hearing about.

From what we understand, AdColony employees were told about the acquisition over the weekend.

Norway-based Opera is known for its web browser software for mobile handsetsPCs, and TVs, with its search results and content recommendations based around visual, tile-style interfaces. On mobile devices, one of Opera’s main selling points is its compression algorithms that the company promises give faster download speeds that use up less data, and therefore cost less to use.

But, as with other companies that make web browsers, Opera has developed other lines of business to help monetize that software. Those efforts include an app storefront and a mobile advertising network.

The latter business, which operates under the Opera Mediaworks brand, also includes AdMarvel, which Opera acquired in 2010, and other, more recent additions like apprupt, a German startup focused on rich media advertising. In all, prior to AdColony, Opera has made eight acquisitions in the past four years, with several of those to further its advertising business.

It looks like AdColony could be used in Opera’s effort to expand that network even further into video ads. The startup, which launched in 2011 and was backed by Insight Venture Partners (amount undisclosed), emphasizes performance — Anthony says every time he meets with the executives, they come up with a new way to show off the speedy loading time of their video ads.

That’s an area that Opera, with the compression technology that it uses in its browsers to reduce pageload and dataload, could potentially boost further. And given Opera’s interests in connected TVs, you can see where a video-focused play makes a lot of sense.

Video ads, like other dynamic ad units, command higher rates and provide another format for Opera to sell to clients. In January, AdColony said that it reached a run rate of $100 million in gross revenue.

But the company could also see a negative impact up ahead on its ads delivered over iOS devices, in light of some recent changes that Apple is making around ads in apps — as Sarah reported, it has started to reject apps that offer rewards for video views and social shares.

You can see an example of how an AdColony ad within an app works here: