Comcast seeks to buy firm inserting, tracking Web ads

The home page for California-based FreeWheel , which Comcast is attempting to buy for $320 million.
The home page for California-based FreeWheel , which Comcast is attempting to buy for $320 million.
Posted: March 05, 2014

Comcast Corp., seeking to broaden its Internet services and make money on streamed TV content, is negotiating to purchase a San Mateo, Calif., company that inserts and tracks advertising in Internet and mobile video.

Comcast is reportedly looking to pay $320 million for seven-year-old FreeWheel Media Inc.

Comcast, the nation's largest cable-TV company and residential Internet provider, already owns the Seattle-based thePlatform, which manages and hosts on-demand video for Comcast and other companies.

Analyst Dan Rayburn of the Frost & Sullivan research firm in San Antonio, Texas, said Monday that Comcast appears to be assembling an "online video ecosystem" to manage, monetize, protect, and deliver online video, which is booming.

Comcast has developed technology that allows its Xfinity subscribers to authenticate themselves online so that they can watch online video on a tablet or mobile phone.

"Inserting ads into video is not easy to do, because there is not a standard on the Internet," Rayburn said, noting that there is advertising that automatically plays before a video (also known as pre-roll), advertising within the online stream, advertising overlays, and in-page advertising.

FreeWheel can place advertisements and track them across multiple platforms for advertisers and entertainment companies, Rayburn said.

Content companies such as Comcast-owned NBCUniversal and Walt Disney Co. subsidiaries are seeking to advertise on online video to develop new revenue sources.

The discussions between Comcast and FreeWheel were first reported in the industry publication TechCrunch over the weekend. A Comcast spokeswoman declined to comment on Monday. Officials with FreeWheel could not be reached for comment.

"Advertising will follow the viewer growth," Doug Knopper, cofounder and co-chief executive officer of FreeWheel, told USA Today last month, adding, "The Internet is mimicking TV."

Rayburn said Comcast could use the FreeWheel technology itself and allow the California company to operate as a stand-alone subsidiary, as it does with thePlatform. In addition to California, FreeWheel has offices in New York, London, and China.

The two top officers at FreeWheel, Knopper and Jonathan Heller, previously worked for DoubleClick, the Internet ad-insertion engine now owned by Google, according to the company's website.

Heller says on the site, "I get to take all of the lessons learned from the first Internet revolution and apply those scars and skills to the new TV revolution."

Investors in FreeWheel include Steamboat Ventures, Turner Broadcasting, DirecTV, Battery Ventures, and Foundation Capital.

Two publicly traded companies in the online video ad-services industry are YuMe Inc. and Tremor Video Inc.

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