Los Angeles -- Internet pioneer AOL Inc. on Monday said it has agreed to buy European video distributor GoViral, saying that it "supports our overall content strategy by creating another immediate delivery path for all of the great content we are generating daily," in a deal worth $96.7 million, the latest in an acquisition spree AOL has pursued in an effort to recast itself as a destination for online video and articles.
Under the deal, the struggling online internet company has shelled out an initial amount of $74.1m for GoViral, which was jointly established in 2005 by Danish internet and advertising executives Jimmy Maymann and Claus Moseholm, the company will further pay the remaining $22.6m over the next two-year period following completion of the deal. Co-founders of online content company to pocket tens of millions of pounds after takeover.
This is AOL's first major European acquisition since its devastating 2008 deal to buy social networking website Bebo for $850m. AOL disposed of Bebo to private equity firm Criterion Capital Partners for a fraction of that price last year.
AOL says: "As part of AOL Europe, GoViral will help deliver both branded video content and premium digital content from across the entire AOL network of content sites -- eventually becoming something that we offer to our advertisers as a strategic and tactical advertising solution -- both internationally and in the U.S."
GoViral, which was founded in Denmark in 2005 but is based in London, has a network of 18,000 sites through which it distributes video campaigns for brands, and where 75% of its 100-strong workforce is employed. Moseholm moved to London in 2006 and Maymann, who has an executive MBA from London Business School, spends the majority of his time running the business from the city. It states that these videos generate more than 60 million monthly views.
"From the very start we knew that the key to succeed was to be in London," said Maymann, speaking to MediaGuardian.co.uk.
AOL revamped its main home page last year to focus on video and local integration. The refurbished home page more prominently features AOL's original news, entertainment and other content, part of the company's broader push to revive its fortunes and redefine itself as a hot spot for online videos and articles.
According to the announcement: "In the second half of 2010 alone, AOL has signed deals with more than 20 premium content partners and digital studios to deliver a mix of high quality programming to AOL's audiences around the world." They include with Endemol, Vuguru, Electus, Next New Networks, Channel Flip, Telepictures, Dannii Minogue, Heidi Klum and MarloThomas.com.
GoViral, which will become part of AOL's ongoing plan to deliver video content across its network, and with GoViral's network of 18,000 branded sites officially becoming part of AOL's European operations while being integrated into the brand internationally. Goviral's clients include Nike, Sony, Coke, Nokia, Audi, Mercedes and Proctor & Gamble.
The announcement specifically mentions the acquisition is being done by "AOL Europe" and is bringing-up AOL Europe's SVP Kate Burns as having driven it. The former Dailymotion exec was absorbed by AOL before it off-loaded Bebo, where she was VP.
According to Burns: "Video is core to AOL's consumer programming strategy and GoViral has created an incredibly compelling platform that delivers highly measurable and cost effective solutions to publishers and advertisers."
"We believe that GoViral offers a unique proposition in today's market, and allows us to match our ambition for premium content creation and engaging advertising, with highly targeted distribution at scale," Burns added.
"AOL has made a clear commitment to deliver great original content and, with their strong US position, it is a great accelerator for us to grow internationally and realize the potential of video," said the GoViral chief executive, René Rechtman.
AOL's UK operation, which has recently been restyled and strategic refocusing following the demerger from Time Warner, has been building its content, offering striking deals with acts including Harry Hill and launching women's site MyDaily.
AOL also added to its content base Monday after it agreed with CliffsNotes publisher John Wiley & Sons Inc. (JWA, JWB) and Coalition Films to develop a series of comedic videos based on the publisher's ubiquitous literature guides. Terms of the deal weren't disclosed.
Goviral, which will maintain its offices in the U.K., Germany, France, Denmark, Sweden and Spain and plans to expand further soon, will distribute branded video content across the Internet for major brands, media agencies, creative agencies and content producers. The network allows advertisers to reach a large audience at a low cost, the Internet company said.
Last year, AOL also acquired StudioNow, 5min Media, TechCrunch Inc., Thing Labs, Pictela and about.me. The company has also hired hundreds of writers recently to create more original content.