Australian Telco Telstra Acquires Video Distribution Startup Ooyala

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Streaming video distribution and monetization platform Ooyala is being acquired by Australian telco Telstra, which will invest $270 million to reach a 98 percent ownership stake in the company. This is up from the 23 percent it owned through a previous investment round.

According to the press release that just dropped, Ooyala will be operated as a wholly owned subsidiary of the Australian telecom firm. As such, its management and exec team will stay intact, and it will continue to be headquartered in Silicon Valley.

Ooyala will also continue to serve its existing clients of cable networks, movie studios, and other distributors who are looking for ways to make their videos available online and through mobile and tablet apps. Its customer list includes names like Univision, Comedy Central, NBC Universal, Telstra, ESPN, Telegraph Media Group, and Telefonica, among others.

With the acquisition, Ooyala isn’t the first or only video distribution platform to live under a big corporate parent like Telstra. Comcast acquired ThePlatform back in 2006, and that company continues to serve the needs of big cable networks and distributors. If anything, being part of the larger entity could help Ooyala to thrive and grow in a competitive marketplace.

Competitor Brightcove went public two years ago, raising $55 million in the process. But its shares have struggled since then, and are now about half off their original listing price.

Having the security of operating as a wholly owned subsidiary could shield Ooyala from dealing with the public markets, while serving a growing customer base. Meanwhile, for Telstra the acquisition helps it offer new, differentiated services to business customers as part of its newly launched Global Applications and Platforms (GAP) business.