|[January 23, 2014]
AOL Makes It Personal with Agreement to Acquire Gravity
NEW YORK --(Business Wire)--
AOL (News - Alert) Inc. (NYSE: AOL) today announced it has entered into an agreement to
acquire Gravity, a leading company in multi-screen content optimization
and personalization and the company that created the Interest Graph.
Gravity personalizes the Internet beyond search and social by applying a
personal and real-time filter to the ever-growing volume of digital
information available for consumption. Gravity's patented technology
creates Interest Graphs based on individuals' interests, preferences and
habits and allows publishers to offer a tailored and relevant selection
of editorial and advertising content to readers.
Gravity's technology will act as an accelerator in virtually all areas
of AOL's strategy to create more engaging, relevant and valuable
experiences for its consumers, advertisers and publisher partners.
The combination of AOL and Gravity will:
Advance AOL's ability to distribute relevant and engaging content and
advertising across the Internet through intelligent technology;
Personalize and make more engaging AOL's portfolio of brands for
consumers through the delivery of relevant content in real-time across
Enable AOL's publisher network of more than 2,000 partners to deliver
personalized and relevant content recommendations and branded content
to each of its users;
Allow AOL's current and prospective advertisers to deliver relevant
branded content to consumers based on their specific interests where
and when they are most engaged;
Enhance the performance of AOL's programmatic platform with improved
analytics and targeting;
Further strengthen AOL's technology infrastructure by supplying
relevant and engaging content and ad experiences in all formats and
across all screens in real-time;
Add Gravity's highly talented executive team as well as a team of
engineers with expertise in content optimization and data science to
the AOL ranks.
"The web is moving to the era of personal, and a personal web filter
will reshape how consumers get information and services," said AOL
Chairman and CEO Tim Armstrong. "Gravity is joining AOL to lead the
personalization transformation of AOL's brands and platform partners."
"Every day we're presented with an overwhelming amount of information to
consume on our favorite websites and apps," said Gravity CEO Amt Kapur.
"It's time to move beyond searching for the best content to having the
best content search for you. We believe that by combining AOL's vast
brand, publisher and advertiser network with Gravity's interest graph
technology, we can do just that."
Gravity will bring to AOL a client base of top publishers and brands
such as Sony, Intel (News - Alert), USA Today and GAP. Since the launch of the Gravity
API last year, there have been more than one billion personalized page
views per month on some of the biggest publisher sites on the web, and
its technology has increased engagement by 240% compared to sites that
do not have personalization.
After closing, the Gravity product and team will report to AOL Brand
Group Head of Product, Luke Beatty.
AOL has agreed to acquire Gravity for a closing purchase price of
approximately $83 million. An additional $7.7 million of consideration
will be deferred and paid over two years following closing. As part of
the transaction, AOL will acquire approximately $12 million of net
operating losses, which is expected to result in a future cash tax
benefit to AOL of approximately $5 million. AOL expects the acquisition
to close in the first quarter of 2014.
AOL Inc. (NYSE: AOL) is a brand company, committed to continuously
innovating, growing, and investing in brands and experiences that
inform, entertain, and connect the world. The home of a world-class
collection of premium brands, AOL creates original content that engages
audiences on a local and global scale. We help marketers connect with
these audiences through effective and engaging digital advertising
Founded in 2009 by early-on MySpacers Amit Kapur, Jim Benedetto, and
Steve Pearman, Gravity aims to personalize the Internet. Through our
applications, Gravity understands people's interests so that our
partners can create more relevant experiences for their users. Our goal
is to build a smarter internet that helps people sift through the
overwhelming amount of information on the web, while delivering a
serendipitous experience that exposes them to the breadth and depth of
Today, Gravity works with some of the largest, most well-known brands on
the internet, and processes hundreds of millions of data points each day.
For more information, please visit Gravity.com and follow @Gravity on
Twitter (News - Alert).
This release contains "forward-looking" statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended. Such forward-looking
statements include, but are not limited to, statements regarding the
anticipated benefits of the transaction, the expected closing date and
other statements identified by words such as "may," "will," "intend,"
"estimate," "should," "expect" or similar expressions. These
forward-looking statements are based on the current expectations and
beliefs of AOL's management, and are subject to uncertainty and changes
in circumstances, including, but not limited to, the approval of the
transaction by antitrust authorities, the satisfaction of the closing
conditions to the transaction, the competitiveness and quality of our
combined offerings and significant competition in the internet
advertising industries generally, our ability to timely and successfully
integrate Gravity's operations into our operations, our ability to
retain, hire and develop skilled employees and the parties' performance
of their obligations under the agreements. Any forward-looking
information is not a guarantee of future performance and actual results
may vary materially from those expressed or implied by the statements
herein, due to changes in economic, business, competitive,
technological, strategic and/or regulatory factors, as well as factors
affecting Gravity's and AOL's operations and businesses. More detailed
information about these factors as they relate to AOL may be found in
the section entitled "Risk Factors" in AOL's Annual Report on Form 10-K
for the year ended December 31, 2012 and in AOL's Quarterly Report on
Form 10-Q for the quarter ended September 30, 2013 filed with the SEC (News - Alert).
AOL is under no obligation to, and expressly disclaims any obligation
to, update or alter the forward-looking statements contained in this
release, whether as a result of new information, future events or
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