Fresh off its acquisition of Time Warner, AT&T is keeping the M&A checkbook open. This time AppNexus is in AT&T’s shopping cart, as the telco makes its first significant AdTech play. Although terms of the deal haven’t been reported yet, WSJ is pegging the purchase price in the $1.6-2.0B range. Not too shabby for an old guard techster who many in the industry had considered past its prime!
So why did AT&T buy AppNexus? It’s all about the vertical integration of digital media. With AT&T’s purchase of Time Warner they now own a substantial chunk of content and the distribution pipeline to deliver said content. Now with AppNexus under the tent AT&T can own part of the DSP-to-SSP marketplace itself. This move gives AT&T the best chance to compete with Google who basically invented the sell-your-content-in-your-own-marketplace game. Besides Google, the acquisition also gives AT&T better footing to compete against Verizon. Over the past two years Verizon has stitched together a similar business model – first with its acquisitions of AOL and Yahoo (which they rebranded into Oath), and then the launch of the Oath DSP to handle buy side of programmatic transactions.
I know this might be my inner tech biz geek talking, but isn’t it fascinating to see traditional telcos reinvent their cellular businesses to compete in the broader digital media space?