Roku Inc (NASDAQ:ROKU) plans to take over Dataxu for $150 million in stock and cash. The company streams more ad support hours when compared to Over-The-Top (OTP) platform. With this takeover, Roku plans to get a significant share of the ad market.
Software to manage ad spend
Roku, which is engaged in the manufacture of TV dongles and streaming boxes, is diversifying into the ad market. Acquisition of Dataxu helps Roku provide self serve and automated bidding software for the marketers and allow them to manage, buy, or plan ad spending across OTP and TV providers.
Spending on traditional TV ads
The spending on Traditional TV ads is around $70 billion. Roku has over 30.5 million active accounts. It lost a considerable amount of money last year. The acquisition of Dataxu will help Roku to improve revenues by garnering a larger share of the ads. Roku would close the acquisition in Q4 2019. Following the deal, the shares of Roku increased by over 2% on Tuesday morning. The team at Dataxu is strong in data science, software engineering, and analytics.
Chief Executive Officer of Roku, Anthony Wood, said the TV advertising is trending towards data-driven models and OTT focusing on business outcomes. The acquisition of Dataxu helps the content partners of Roku to monetize the inventory and expedite the ad platform of Roku.
According to Mike Baker, Chief Executive Officer and founder of Dataxu, the company has the vision to bring its capabilities to TV, the dominant form of media. A year ago, Dataxu hired an investment banker – GCA Adviser to consider a possible sale. The company sought a valuation of around $300 million. It has mobilized funds of $87.5 million. Amazon has opened up connected apps, which are integrated with APS (Amazon Publisher Services), to advertisers that work with The Trade Desk and Dataxu in July.
4K HDR streaming player is available in the UK
Roku has announced the availability of a 4K HDR streaming player, a redesigned version of Roku Express, in the UK in September 2019. The customers can buy HD Streamer for GBP 30. The company introduces Roku Premier in the UK for GBP 40.