SCUTTLEBUTT: AOL Has Made A ~$400 Million Offer To Buy

Tim Armstrong

There is gossip among industry sources that AOL has made a $375 million to $425 million offer to buy video ad tech startup

We heard the rumour from a usually reliable, long-time source of ours who says he heard it from a banker at one of the firms working on the deal.

Our source says has not yet told AOL if it will accept the deal or not.

We asked other people in the industry if they’ve heard this gossip, too.

A few had heard that is in play. One said he’d heard the same rumour we did.

We called a source at and he refused to comment.

Certainly buying makes some sense for AOL.

AOL’s healthiest, fastest growing revenue stream comes from – a banner ad business wherein ads are bought in real-time and targeted with all kinds of specialty data.

Buying would allow AOL to expand that business into video advertising, where the prices are much higher.

The problem is: $400 million is a lot of money for AOL to spend. It only has $467 million in cash on its balance sheet at the moment.

Founded in 2006, has raised about $50 million from VC firms such as Redpoint, Gemini, and Spark. In February, Bloomberg reported that it was considering an IPO.

One banker source of ours says it would make some sense for to sell rather than IPO because the trading public might lump it in with Tremor, a weaker, already public company that describes itself with very similar language.

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