AOL Pays Too Much for TACODA

Although not publicly disclosed, insiders close to the deal indicate AOL payed $275MM to purchase the behavioral targeting firm TACODA. That's a big sum of money for a 100 person company, and an unprofitable one at that. Apparently, AOL isn't confident they could build the technology in-house, which makes sense given their track record. Nonetheless, I still think it was a smart move by AOL, who is basically selling off their customer base to the Telcos/MSOs as they can no longer compete as an ISP, and is putting all their eggs in the Advertising basket. According to eMarketer, Advertisers will double their spend on targeted display advertising to $1 billion, and then nearly triple to $3.8 billion by 2011.


TACODA was financed by Union Square Ventures, and you can read their response to the acquisition here.

technorati tags: AOL, advertising,
TACODA