AOL in its latest effort to bolster its online advertising business has announced that it is acquiring Tacoda Inc., a closely held marketing firm that specializes in delivering ads based on users’ online activities. As AOL shifting its subscription based business model to advertisement based business model, it is constantly looking for making strategic acquisition to strengthen its advertising tools. AOL has recently acquired Third Screen Media that delivers advertisement to mobile phone and online video firm Lighting cast.
AOL has announced that it has entered into a definitive agreement to acquire Tacoda, whose ‘behavioral targeting’ technology will complement AOL’s online advertising services. The financial terms of the deal have not been disclosed yet. However, according to market speculations AOL might be paying somewhere between $200 million and $300 million.
With the latest acquisition of Tacoda, AOL dived into a growing behavioral targeting market that could hit $3.8 billion by 2011, from $350 million in 2006, according to a latest eMarketer report. Moreover, the targeted advertisement tends to be more relevant for the potential consumers as it helps advertisers reach a more engaged audience with less ad impressions.
However, AOL is not the only company aware of the behavioral targeting opportunity. According to reports, Yahoo is also expected to announce SmartAds, a new ad delivery platform driven by behavioral, demographic and geographic targeting. Google has recently acquired to improve its behavioral targeting technology.
