Struggling Mobile Ad Company Purchases New Platform

Many online advertising companies have struggled in recent history to turn a profit. Even as marketers increase spending on popular consumer-based Internet campaigns, companies continue to struggle to turn profit in the constantly changing environment. Millennial Media, Incorporated is no exception to this rule, as the firm continues to report higher revenue, but wider losses; this is due, in large part, to continued relatively fruitless investments in research and development in an ever-changing terrain of Internet campaigns. As a result, last month the company reported their unsatisfactory second quarter revenue. The reports findings fell below expectations, as loss widened to just over fifteen million dollars. This same figure was at just over three million dollars a year earlier. In addition to this, shares for Millennial Media, Incorporated have fallen seventy six percent thus far this year; recently, the stock closed at one dollar and seventy-seven cents.

Nexage Mobile Advertising Logo

In an attempt to turn around their losses, Millennial Media, Incorporated announced that it is acquiring privately owned advertising technology firm Nexage, according to an article recently completed by The Wall Street Journal. Millennial Media, Incorporated is purchasing Nexage for the platform on which they operate; the platform helps automate sales and purchase of mobile advertisements. The hope is that this will allow Millennial Media, Incorporated to improve its capabilities with real time advertisements, allowing it to better reach target potential audiences across several mobile devices. In addition to this, the company believes Nexage’s platform will work well with Millennial’s existing legacy business and associations with advertising agencies.

The deal totals Millennial Media, Incorporated shelling out one hundred and seven and a half million dollars to Nexage. Twenty-two and a half million dollars of the deal will be in cash; approximately eighty five million will be offered in stocks, and Nexage shareholders will be given approximately thirty seven million newly issued shares of Millennial Media, Incorporated shares.