RhythmOne Eyes Acquisitions To Build Advertising Exchange Scale

By Rory Gallivan

LONDON--Online advertising technology company RhythmOne PLC (RTHM.LN) is on the lookout for acquisitions to increase customer numbers so it can better compete with online advertising giants such as Facebook and Google.

Chief executive Brian Mukherjee said in an interview with Dow Jones Newswires Tuesday that the company has been busy developing its exchange for advertisers and publishers to buy and sell online advertising.

"We believe the transition of our platform is complete; now we need to plug more (advertisers and publishers) into our platform," he said, adding that the company hopes to do this through acquisitions.

RhythmOne's platform enables publishers to sell online advertising space without the human interaction that takes place in traditional advertising sales.

Facebook and Google, which operate their own online advertising platforms, dominate online advertising, but making acquisitions would enable RhythmOne to lift the number of customers using its platform and compete with Internet giants more effectively, Mr. Mukherjee said.

Analysts expect the advertising technology industry to consolidate as ad tech companies seek to increase the volume of advertising space being traded on their platform by giving publishers access to as many advertisers as possible and vice versa.

RhythmOne, which was formerly known as Blinkx and initially specialized in video search technology, began life as an independent entity in 2007 when it was spun out of Autonomy, the U.K. technology company bought by Hewlett Packard in 2011.

It achieved a valuation above a billion dollars in 2013 as investors bet it would benefit from the transition to online advertising, but the shares plunged amid issues including a declining desktop advertising market. However, the shares have risen strongly this year as cost cuts help it move back towards profitability.

Earlier Tuesday, the company said its pretax loss for the six months ended September 30 narrowed to $10.7 million from $79.2 million a year earlier, on revenue down to $80.7 million from $91.4 million. The company has been reducing its desktop advertising activities to focus on mobile advertising.

Shares at 1006 GMT, down a penny, or 1.4%, at 37 pence valuing the company at GBP148.1 million.

Write to Rory Gallivan at [e-mail]; Twitter: @RoryGallivan

(END) Dow Jones Newswires

November 15, 2016 06:40 ET (11:40 GMT)

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