After several reports about negotiations, AOL announced today that it had signed an agreement for the acquisition of Israeli online advertising company Quigo. AOL's announcement did not disclose financial details of the deal, but sources close to the company told "Globes" that the price tag would apparently be $350 million.
The announcement came after reports in the US press and media of negotiations between the two companies.
Quigo, which was founded in 2000 by Yaron Galai and Oded Itzhak, develops technology and products for advertising on search engines and for contextual advertising on websites.
“With Quigo, we are putting the final pieces of Platform-A in place. We will be able to offer advertisers and publishers the most advanced set of tools, including contextual and behavioral targeting, superior analytics, and access to the largest display network in the marketplace.” Said AOL chairman and CEO Randy Falco, and continued, "By offering advertisers the ability to target ads based on the content of Web pages using Quigo’s AdSonar technology, we will be able to maximize the value of publishers’ ad inventory.”
Although Quigo was founded by Israelis, its Israel offices are for technical support, while its R&D center has been in New York for four years. The company is financed mainly by US investors, including Disney investment arm Steamboat Ventures. Israeli investors include Leon Recanati's GlenRock Group, Yaron Galai's father Prof. Dan Galai, Igal Lichtman, and the Hebrew University Retirement Fund. Highland Capital, Meritech Capital Partners, and Institutional Venture Partners came into the company at later stages.
A source close to the company told "Globes" today, "Quigo deserves to be saluted. It's a case of entrepreneurs who went against the odds and succeded in becoming an alternative to giants like Google and Yahoo! When investors in Israel refused to listen to their story, they went to New York. When success began to smile on them, they knew when to move out of management positions and appoint a professional CEO, and they also understood how to swim in the cold waters of US publishing and advertising. That's no mean feat. They deserved to succeed."
About six months ago, Quigo completed a $30 million financing round led by Institutional Venture Partners at a valuation estimated at $250 million.
AOL said that Quigo, which employs approximately 100 people, will operate as a wholly owned subsidiary of AOL within the Platform-A organization. Quigo will allow AOL to expand the use of contextual advertising across AOL’s own Web pages, as well as its third-party networks.
The company has more than 500 premium publisher relationships, including a recently finalized deal with Time, Inc., and has a broad network of roughly 3,000 advertisers. Quigo’s AdSonar technology lets advertisers purchase ads on Websites based on specific pages, sections, topics or keywords. Quigo offers many types of advertising and a variety of pricing options including text, display and video ads bought on a cost-per-click, cost per impression, or cost per time basis. In addition, it operates FeedPoint, a search engine marketing business that helps local and retail advertisers efficiently manage their marketing relationships with search engines and comparison shopping platforms.
Quigo will be the fourth advertising company AOL has acquired in 2007. Earlier in the year, AOL acquired Third Screen Media, a leader in mobile advertising, ADTECH AG, a leading ad serving platform based in Frankfurt, Germany, and TACODA, a leading behavioral targeting company. In addition, in September, AOL announced the formation of Platform-A, which it says is the world’s largest digital display advertising platform.
Published by Globes [online], Israel business news - www.globes.co.il - on November 7, 2007
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