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AOL To Buy Millennial Media for $238 Million

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Just after it was bought by Verizon Communications Inc (VZ - Free Report) earlier this year in a $4.4 billion deal, media company AOL Inc announced Wednesday it is buying mobile advertising company Millennial Media Inc . AOL will pay $1.75 per share for Millennial Media, which is a 31% premium to their closing price on Wednesday; it works out to a total value of $238 million.

The deal will provide AOL the opportunity to substantially grow their presence in mobile and digital advertising. Millennial Media’s network is huge: it has the potential to deliver ads to some 65,000 apps. Plus, their roughly 1 billion active users could help accelerate AOL’s position in the U.S. market, as well as global markets like Japan, Germany, and the United Kingdom.

“AOL is well positioned as consumers spend more and more time on mobile devices, and as advertisers, agencies and publishers become more reliant on programmatic monetization tools,” said Bob Lord, President of AOL, in a statement. “As we continue to invest in our platforms and technology, the acquisition of Millennial Media accelerates our competitive mobile offering in ONE by AOL and enhances our current publisher offering with an ‘all in’ monetization platform for app developers.”

“By joining AOL, we will be adding additional mobile expertise to AOL’s growing technology assets,” said Michael Barrett, President and CEO of Millennial Media, also in a statement. “I am excited by what this acquisition means for our shareholders, our employees, and our partners.”

With this acquisition, AOL is now in a unique situation: the company has the chance to take its own consumer data, mix it with Verizon’s abundant data sets, and thus create a distinctive and powerful ad tool for mobile devices. Facebook Inc (FB - Free Report) and Google Inc (GOOG - Free Report) , (GOOGL - Free Report) better watch out: there’s a new player the mobile ad market space, and it looks like they’re here to stay.

The deal is expected to close this fall.

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