AOL Acquires Gravity For $90 Million

AOL have made it public that they have finally reached a deal to acquire Gravity, the content personalization startup, for an initial $83 million, with another $7.7 million to be paid spanning the next 48 months.

Gravity works with brands and online publishers to tailor their content based on the activity of each visitor. This may take the form of “Recommended For You” type widget. Former MySpace exec, Gravity co-founder and CEO Amit Kapur has projected a broader vision in the past, suggesting that this type of personalization is “the future of content.”

The information from AOL said that the acquisition will help the firm to deliver personalized content, both with advertising and editorial.   In a recent interview with Recode’s Kara Swisher, AOL CEO Tim Armstrong said, “We think we can get a clearer signal with content with personalization to improve our results and better monetize what we offer.”

Gravity was founded nearly 5 years ago, back in 2009, but didn’t “fully launch” its platform until only a year ago, something that Amit Kapur had attributed at the time to the firm’s “methodical” approach to building something “big and disruptive.” It raised more than $20 million in funding from investors including August Capital, Redpoint Ventures and Upfront Ventures.  With thanks to the reach of its publishers, Gravity says it has personalized an impressive, 1 billion page views per month! It also says it increases engagement by 240 percent compared to non-personalized sites.  AOL has said that it is also acquiring $12 million in net operating losses, which will result in a cash tax benefit worth $5 million. The deal is expected to finalise in the first quarter of 2014.

This acquisition will no doubt give AOL extra leverage amongst social networking sites and online content publishers, to transform the masses of user data into a specific target of revenue advertising.

[Image via bgr.in]

SOURCE: http://techcrunch.com/2014/01/23/aol-acquires-gravity/