Akamai Technologies and acerno announced today that the two companies have signed a definitive agreement for Akamai to acquire acerno in a merger transaction. The transaction, which is subject to customary closing conditions, including the approval of acerno’s stockholders, is anticipated to close later this quarter. The acquisition is not expected to have a material impact on Akamai’s normalized earnings* in 2008.
The acquisition of acerno, a unique online co-operative of shopping and purchase data for enabling more relevant online advertising, is expected to greatly enhance Akamai’s Advertising Decision Solutions, a new product line also being announced today. These new Akamai solutions will enable online advertising businesses to boost the performance of their online marketing investments by driving smarter advertising decisions based on relevant audience segments.
Real-Time Solution for Online Advertising Decision-Making
Akamai’s Advertising Decision Solutions are designed to help buyers and sellers of online advertising create attractive audience segments with the necessary scale to achieve better results from campaigns and investments. acerno’s powerful technology will complement the ability of Akamai’s Advertising Decision Solutions to seamlessly incorporate real-time anonymous Web browsing information with anonymous online purchasing data from advertisers’ websites to present the most relevant ad. In addition, Akamai’s Advertising Decision Solutions can be enabled without costly and time consuming implementation, leading to faster time to market and increased ad revenue.
As a result, publishers will be able provide advertisers with better access to relevant consumers, strengthening the relationship with those advertisers and driving increased advertising revenue. In addition, advertisers will benefit by seeing greater return on investment and improved ad campaign performance, while cutting waste from their ad budgets by reaching their intended audience at the right time. Finally, consumers, often faced with irrelevant online advertising clutter, will enjoy greater advertising relevance and continued growth in the amount of content that is available for free because it is supported by advertising.
Protecting Consumer Privacy
Akamai already powers the online efforts of many of the Internet’s largest publishers and ad networks, as well as hundreds of leading consumer brands. Akamai’s Advertising Decision Solutions will build on the company’s unique and trusted position in the online industry.
As members of the Network Advertising Initiative (NAI), Akamai and acerno are committed to maintaining both user privacy and customer confidentiality. All of Akamai’s Advertising Decision Solutions, as well as acerno’s services, rely solely on anonymous and non-personally identifiable end user information.
“Akamai’s new Advertising Decision Solutions are a critical advancement in our product portfolio, designed to stimulate the economic model of online advertising by bringing greater simplicity and effectiveness to both ad buyers and sellers,” said Paul Sagan, president and CEO of Akamai. “As a trusted and strategic partner to today’s leading online retailers, publishers, and advertisers, supporting an estimated $84 billion in e-commerce transactions on our network for U.S. retailers alone, Akamai’s goal is to offer the industry’s most efficient online advertising solutions, while being a leader in upholding consumer privacy. Our investment in developing the Advertising Decision Solutions line over the past two years and acquiring acerno today, represent a strategic next step for Akamai.”
Mike Afergan, Akamai’s CTO and senior vice president of Advertising Decision Solutions, added, “We plan to leverage and grow acerno’s unique industry co-operative to enhance our new solution line. Our combined capabilities with acerno should benefit the eco-system of ad networks, online publishers and Internet advertisers by providing them with real-time, actionable data to serve more relevant marketing messages. Our Advertising Decision Solutions have already been adopted by several key stakeholders in the online advertising industry, resulting in higher revenues and better results.”
“This is a big win for the online advertising industry,” said Tom Sperry, president and CEO of acerno. “Greater precision in the advertising world reduces inefficiency, so advertisers earn a higher return on their investment. Together, Akamai and acerno will be able to create a unique solution for advertisers to expand their reach of customers across multiple publishers and networks, while leveraging predictive and descriptive modeling for improving conversion rates. For acerno’s customers, Akamai will bring instantaneous scale and increased efficiencies to further improve the value of the co-op.”
Many of the Internet’s leading retailers currently contribute anonymous data to acerno’s information co-op. This data is used in acerno’s predictive models to determine why online shoppers actually browse, add merchandise to carts and eventually buy. In turn, this allows co-op members access to the most comprehensive source of information about what millions of online shoppers are looking to purchase and when they are likely to buy.
“Tom Sperry and Dave Hinton, chief operating officer of acerno, have assembled a first-class team, designed a set of breakthrough services, and built trusted relationships with a valuable set of clients,” Sagan added. “We look forward to welcoming the entire acerno team to Akamai and to working together to build even more value for our customers.”
Under terms of the agreement, Akamai will acquire all of the outstanding equity of a holding company that owns acerno in exchange for approximately $95 million in cash, subject to certain closing adjustments. The merger transaction is expected to be accounted for by Akamai under the purchase method of accounting.