Seeking Alpha

Facebook buying major video ad tech platform LiveRail

  • Facebook (FB -2.1%) is buying LiveRail, owner of a video ad tech platform that connects publishers/content providers such as Gannett, Dailymotion, A&E, and the MLB with video ad inventory.
  • The price is undisclosed, but should be substantial: LiveRail was on a $100M/year run rate last fall on the back of 300% Y/Y revenue growth, and was eying a possible 2H14 IPO. The startup serves 7B video ads/month, and is part of a burgeoning market for programmatic (automated/algorithm-driven) video ad platforms.
  • Rivals include Google's DoubleClick unit, AOL's Adap.tv unit, Tremor Video, (TRMR -2.5%), and YuMe (YUME -0.3%). LiveRail has argued its publisher-centric approach sets it apart. "We've reached a point where the market is larger, more mature and more competitive. You need to be the best at one thing in order to differentiate."
  • Facebook: "We believe that LiveRail’s excellent product ... and Facebook’s expertise with relevancy, delivery and measurement will help us make video advertising much better for everyone." The company is just months removed from launching its news feed video ad product.
  • Facebook shares have slipped following the announcement, as have Tremor's.
  • Earlier: Facebook roundup
  • Update: A source tells TechCrunch Facebook paid $400M-$500M. (h/t Charles Moscoe)
Comments (29)
  • rio hedge
    , contributor
    Comments (11) | Send Message
     
    Implications to be widespread into FB'secosystem. This purchase leverages Facebook ad revenue.

     

    Long FB
    2 Jul, 02:31 PM Reply Like
  • Stone Fox Capital
    , contributor
    Comments (5913) | Send Message
     
    ad revenue that won't exist if FB keeps focusing on delivering ads instead of a better customer experience (ala less ads and new technology).
    2 Jul, 02:40 PM Reply Like
  • James Sands
    , contributor
    Comments (1998) | Send Message
     
    I sure haven't stopped using Seeking Alpha any less with the gigantic PowerShares QQQ and UTICA College banners adjacent to this comment.

     

    Advertising is synonymous with media-related products. This includes social. As long as I can get my "social benefits" advertising is no big deal.

     

    Just like TV, web and mobile will have advertising grow. Anyone who begs to differ is in the minority.
    2 Jul, 03:10 PM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    @James, for a long time I was in the camp that advertising could wane for
    FB, TWTR, and social media in particular. Don't get me wrong, I rode FB from mid 30's to the first time it hit mid 60's and happily sold. One of the reasons I sold was my view on advertising going forward. I don't click on the ads and for the most part consider them a nuisance. But I still go on FB.
    Then it literally hit me like a ton of bricks....I don't watch much TV anymore but for the last 7 or 8 years anything I watch is taped first on my DVR so I
    don't have to watch the ads. Then I realized that Coke, Chevy, Viagra, Tide,
    etc...aren't advertising any less. And people don't see a TV ad and run out and buy a Chevy or switch to Coke...doesn't matter- it's about name recognition and competition.So given the competitive nature of selling products and services, add to that the fact that corporate advertising is a 100% write-off and BINGO! Social media advertising will continue to maintain
    and depending on the company, grow.
    That aspect is a no brainer. Will FB capitalize on all their acquisitions, I doubt it, in fact I know it. But they have a boatload of money and are now quite profitable due mainly to advertising. While advertising will likely plateau at some point by then FB needs to have expanded their business in to other realms for the stock to grow into it's rich valuation- they are clearly working on this.
    Should be interesting to watch unfold.
    2 Jul, 07:34 PM Reply Like
  • gwynfryn
    , contributor
    Comments (3977) | Send Message
     
    It seems to have been true for BBRY at least; because they no longer saw any adds, most of the population seem to think BBRY no longer exists!
    3 Jul, 11:35 AM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    BBRY barely exists........for now.

     

    Those BBRY threads are just person after person who want to have John Chen's babies......it's kinda weird but entertaining as well. Many delusional
    folks posting the most laughable things you can imagine.

     

    BBRY going to $100 this year
    BBRY going to surpass AAPL & GOOG
    BBRY the greatest thing since sliced bread.

     

    When I honestly posted I haven't seen or known anyone with a blackberry phone in about a decade they act like I live in a cave when in actuality I
    live in reality.
    3 Jul, 03:47 PM Reply Like
  • Patience29
    , contributor
    Comments (161) | Send Message
     
    @James

     

    Guess you've never heard of ABP (AdBlockPlus). Their slogan?

     

    "Ads are history".
    3 Jul, 05:14 PM Reply Like
  • James Sands
    , contributor
    Comments (1998) | Send Message
     
    Patience,

     

    You are correct, I have not. But I'm not interested in the product. I don't mind ads at all. They don't bother me.

     

    But on an economic level, if ads are history in totality, so is content. The two are married, and we know what the marriage contract is, until death do us part.

     

    Netflix is the new attempt at no ads with content. But clearly, with no real time programming or content, it is far less valuable.

     

    What are you going to do about product placement advertising in the shows and movies that you watch?? Advertising has never been without content in real time and this will not change, but AdBlockPlus away.
    3 Jul, 05:18 PM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    The advantage FB, GOOG, and other social media / internet companies have over TV when it comes to advertising is you can't avoid them-TV that is, unless you DVR everything like me and you still have to FFW through them whereas on the internets they are much easier to ignore or quickly make disappear by hitting the x.
    In essence ads on the internets are less intrusive and annoying than on TV.
    Also, at least internet ads, depending on the company, are targeted towards the individual. On TV, for example, you have to put up with ads about pharmaceutical drugs which you do not now and hopefully will never need -
    then when the commercial is coming to a close it lists all the possible side affects which often include death along with a litany of other side affects that often sound worse than the affliction the drugs treat. And most men aren't too concerned about Massingills or Tampons benefits while women probably get sick of erection pill ads.
    3 Jul, 05:24 PM Reply Like
  • James Sands
    , contributor
    Comments (1998) | Send Message
     
    Fair points #22643611.
    3 Jul, 05:26 PM Reply Like
  • 22643611
    , contributor
    Comments (2101) | Send Message
     
    Lol, sorry I edited it about 4 times before I was satisfied.
    3 Jul, 05:30 PM Reply Like
  • Charles Moscoe
    , contributor
    Comments (1437) | Send Message
     
    These work for display, hard to block a pre-roll video ad (like LiveRail serves).
    3 Jul, 06:02 PM Reply Like
  • glssmrbl
    , contributor
    Comments (322) | Send Message
     
    I like your viewpoints on FB. I too sold after a big run-up but I do think advertising has become less of a focus with FB.

     

    Acquisitions are good for the business but not at the price they pay for them. Unless heavy shorting takes the stock down a peg or two my conviction is to stay out.
    3 Jul, 09:35 PM Reply Like
  • Charles Moscoe
    , contributor
    Comments (1437) | Send Message
     
    Sale price rumored by TechCrunch to be $400M-$500M, or about 4-5 times 2013 revenues.
    2 Jul, 03:20 PM Reply Like
  • xilef
    , contributor
    Comments (447) | Send Message
     
    As long as we don't see a B next to the price tag, this purchase is definitely inline with and compliments their current ad objectives.
    2 Jul, 04:03 PM Reply Like
  • combatcorpsmanVN
    , contributor
    Comments (701) | Send Message
     
    $FB - The naysayers have been whining about 'this' and 'that' regarding FB since the shares were in the high teens. I'm waiting for these "I missed the boat on FB and I'm mad as hell" to start saying that Zuckerberg needs to be replaced by Steve Ballmer or John Chambers. They're that absurd!

     

    $FB is a juggernaut -- if they can't see it these naysayers either need glasses or new glasses - hasn't been obvious since the shares are up about 150% in a year.

     

    Come on -- give it a rest or wake up and buy some shares.
    2 Jul, 03:55 PM Reply Like
  • mlauritz
    , contributor
    Comments (354) | Send Message
     
    I personally can't wait until the FB Longs scream:

     

    "I'm on the Boat, It's the Titanic, & I'm Screwed!"
    2 Jul, 09:38 PM Reply Like
  • James Sands
    , contributor
    Comments (1998) | Send Message
     
    Wrong movie dude, it's more like "And they lived happily ever after"...
    2 Jul, 11:24 PM Reply Like
  • jimmyb
    , contributor
    Comments (178) | Send Message
     
    Drop in FUEL, TRMR, YUME today could be some fear that the big boys are all getting dance partners and when the music stops some may be left out in the cold.
    2 Jul, 04:02 PM Reply Like
  • James Sands
    , contributor
    Comments (1998) | Send Message
     
    And Criteo rallied because they actually have exclusive ties with publishers.

     

    The past couple of years have made it clear that unless you are Google or Facebook, you are not that big of a deal from a product marketing standpoint. Or more generally, if you do not have critical mass as a digital publisher property owner, you don't have much going for you.

     

    We can read all the ROIs out there from smaller fish, but they are dependent mostly on non primary data. Which is more valuable, an algorithm telling you what someone is doing from a secondary data source or cookies, or Facebook or Google telling you what their users' preferences are and how they interact on the internet.....
    2 Jul, 04:15 PM Reply Like
  • scottinno
    , contributor
    Comments (22) | Send Message
     
    FB is going to be an advertising behemoth.
    2 Jul, 04:45 PM Reply Like
  • mlauritz
    , contributor
    Comments (354) | Send Message
     
    Atta'Boy Zuck! Spend that Bubblelicious FB Stock while the getting is good!

     

    Your investors don't seem to care that their ownership stake is shrinking every Quarter - keep it up!
    2 Jul, 08:44 PM Reply Like
  • James Sands
    , contributor
    Comments (1998) | Send Message
     
    Exactly, following in Google's footsteps......
    2 Jul, 09:20 PM Reply Like
  • Tippydog
    , contributor
    Comments (1820) | Send Message
     
    Further entrenching Facebook as one of our nation's great schlock brands.
    2 Jul, 11:02 PM Reply Like
  • Charles Moscoe
    , contributor
    Comments (1437) | Send Message
     
    TechCrunch updates rumored sales price to $500M.
    2 Jul, 08:49 PM Reply Like
  • kata
    , contributor
    Comments (452) | Send Message
     
    Cant wait to see the qtr, when r the numbers due?
    2 Jul, 11:58 PM Reply Like
  • James Sands
    , contributor
    Comments (1998) | Send Message
     
    After market, Wednesday, July 23rd.

     

    http://bit.ly/1s30MJr
    3 Jul, 10:31 AM Reply Like
  • gwynfryn
    , contributor
    Comments (3977) | Send Message
     
    FB have bought a company that's actually making money? Well, I suppose this revolution in thinking was inevitable, as they've pretty much tried everything else...
    3 Jul, 11:37 AM Reply Like
  • kata
    , contributor
    Comments (452) | Send Message
     
    Wish FB would buy Pinterest before they IPO
    3 Jul, 11:53 PM Reply Like
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