Yahoo Acquires Maven, Video Syndie and Ad Firm

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Yahoo has acquired video platform Maven Networks in a bid to boost the user experience, distribution and ad capabilities around video on its own and its partners' properties.

With the $160 million transaction, the firm also hopes to support its considerable video licensing agreements and better compete with dominant video players Google-owned YouTube and Brightcove for video syndication contracts.

Cambridge, Mass.-based Maven's video player and ad platform is now used by 30 media companies, including Fox News, CBS Sports and the Financial Times, along with their affiliates. It also has relationships with two members of Yahoo's long-discussed newspaper consortium, which Rebecca Paoletti, director of video strategy sales at Yahoo, referred to as the "core two." One member is Hearst, but Paoletti declined to name the other. Yahoo plans to offer the Maven player and ads to the rest of the newspaper group as well as to other off-site ad partners like Comcast, eBay and Forbes.com.

Yahoo also plans to boost Maven's video advertising capabilities, first introduced in October. Simultaneous to the acquisition announcement, the company unveiled two video ad formats that will appear across the Yahoo network and on partner sites. One, a clickable format, allows users to mouse over a video ad to interact further. The other, Interactive video, consists of a three-second pre-roll "bumper" ad that rolls up into a clickable banner above the video. Advertisers including Adobe, Esurance, HBO and Nestle Purina PetCare, and agencies Deep Focus, Dentsu Next and MediaVest have already tested the units on Yahoo and partner site Comcast.

Yahoo said the Clickable format delivered a 400 percent or greater increase in click-through rates over industry standard traditional video ads with a companion banner. With the Interactive format, half of users engaged with the ads, Yahoo said.

But don't assume Yahoo pre-roll ads are going the way of pop-ups. Paoletti said the company's existing in-stream ad placements, which it serves against professionally produced licensed content, will be integrated into Maven's platform.

"We'd like to evolve pre-roll into something interactive and have measurement that's more about engagement," Paoletti said.

Maven was founded in 2002 with a very different business model, offering a desktop media player with premium sponsorships attached to feature films and other high quality video downloads. More recently it re-focused its development and sales resources on video syndication.

By raising Yahoo's profile in a hot industry sector, the Maven transaction may also help Yahoo in its current face-off with Microsoft, whose unsolicited acquisition bid Yahoo rejected yesterday. In its letter to Microsoft, Yahoo stated the $44.6 billion offer "substantially undervalues Yahoo."

Yahoo's deal with Maven was first reported by TechCrunch last month.

This story has been updated with new information on Yahoo's network relationships and video ad formats.