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United Business Media buys online gaming ad business for up to US$8m

United Business Media (LSE: UBM) has acquired privately-owned Game Advertising Online (NYSE:GAO) for an initial US$1m in cash plus up to a further US$7m in performance-related payments.

GAO places in-game and banner advertising on gaming websites, providing access to 50m unique users and delivers over 2bn advertisement impressions per month.

GAO is expected to generate approximately US$4m in revenues for the twelve months to March 2010. The online advertising agency utilises a cost-per-click and cost-per-acquisition business model. According to UBM, The profitable GAO business model will diversify its existing games industry revenue stream and extend its business relationships in the sector.

The newly acquired business targets free-to-play multiplayer online games, casual, browser-based and mainstream gaming websites as well as game community networking sites.

Disclosure: The author holds no positions in the company