AOL Inc. said on Wednesday it would buy Adap.tv, which helps businesses buy and sell ads for online video electronically, for $405 million, its largest acquisition since the 2011 purchase of the Huffington Post.
In recent months, AOL has turned its attention to video advertising as it tries to get more sales from marketers and reduce its reliance on lucrative but dwindling revenue from its dial-up subscription service.
To that end, AOL also reported higher-than-expected revenue for the second quarter on an increase in display, search and ads from third-party networks.
Shares of AOL were up 3.6 percent at $37.50 in trading before the market opened.
Revenue rose almost 1 percent to $541.3 million, compared with the analysts' average estimate of $539.6 million, according to Thomson Reuters I/B/E/S.
Net income fell to $28.5 million, or 35 cents per share, compared with $970.8 million, or $10.17 per share, a year earlier, when AOL sold a group of patents to Microsoft Corp for more than $1 billion.
AOL said it was paying $322 million in cash and about $83 million in stock for Adap.tv.
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