AOL Acquires Tacoda For A Rumored Amount of $200-$300 Million

Posted Sep 6, 2007

The Federal Trade Commission (FTC) stated that Time Warner officially has permission to let its subsidiary company, AOL LLC to make an acquisition of advertising company, Tacoda.  Tacoda is specifically a behavioral targeting company that reaches 120 million Internet users and has partnerships with 4,000 web sites spanning across 122 million unique visitors per month such as NYT, NBC Universal, Food Network,, etc.

AOL announced its official acquisition announcement on July 24th.  “Behavioral targeting is a fast-growing part of the advertising business, as marketers increasingly look to get efficient and measurable results from their advertising dollars. With Tacoda, we can offer advertisers state-of-art targeting tools,” stated AOL’s Chairman and CEO, Randy Falco.

According to the NY Post, the deal is rumored to be worth around $200-$300 million.

This acquisition proves AOL’s interest to remain hyper-competitive in the contextual advertising market that major players, Microsoft, Yahoo!, and Google are remain dominant in.  Yahoo! bought BlueLithium a couple days ago and and acquired Right Media in April.  Google bought DoubleClick for $3.1 billion in April 2007.  And Microsoft bought aQuantive for $6 billion.

Through this acquisition, it appears that AOL has an intention to compete with Google, yet Google powers AOL’s search.  Google bought $1 billion worth of AOL’s shares and gained 5% ownership in December 2005.  So technically speaking, AOL is competing with one of their own company owners.  Contextual advertising competition on the Internet today can be a funny place.  Rather than working with one another, everyone just wants to grab each others contextual throats.