Yahoo is offering to buy News Distribution Network Inc. of Atlanta for $300 million to $400 million as the Internet giant focuses on boosting online ad revenue and video business.
Sunnyvale, Calif.-based Yahoo would expand its operations in Atlanta following the deal, reports the Atlanta Business Chronicle.
Founded in 2007, NDN is a market-maker for video content providers and a generator of content for newspaper publishers. The company’s investors include former Google CEO Eric Schmidt, actor Bill Murray, and baseball Hall of Famer Reggie Jackson. Television personality Jane Pauley is a board member, the business publication says.
In January, NDN was the fourth-largest online video property in the United States — attracting more than 573 million video views per month from 51.3 million unique viewers, according to comScore. NDN ranked ahead of Yahoo sites, Vimeo, Amazon sites, Microsoft sites and Turner Digital.
Yahoo needs to deliver a large, targeted audience to advertisers so it can charge a premium, said the Business Chronicle and NDN provides Yahoo both.
NDN would be a major tool in Yahoo’s strategy to build its online video business, which is a priority. Video generates greater user engagement on websites, which translates into higher ad rates that brands are willing to pay.
Yahoo has been under investor pressure for underperforming on its core online advertising business, which dipped 6 percent to $4.7 billion in 2013.
Launched by former Internap Network Services Corp. CEO Greg Peters, NDN has seen a surge in web-based video. The number of online content videos watched in January was up 34.5 percent year-over-year, while video ad views were up 195.6 percent, according to comScore.