AOL Snaps Up Video Distribution Startup 5Min

Deal Gives Company More Scale in the Fastest-Growing Segment of Online Advertising

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NEW YORK (AdAge.com) -- AOL's video strategy is coming into focus. The company announced a deal for video syndication startup 5Min Media for a reported $65 million.

5Min serves 130 million unique video streams a month, according to comScore.
5Min serves 130 million unique video streams a month, according to comScore.
5Min doesn't own any video. Rather, it syndicates video across the web with advertising attached. The company has a library of 200,000 videos from 1,000 media companies and independent producers, and syndicates channels in various genres such as home, food, beauty, travel and pets. 5Min's distribution network includes 800 websites and it serves 130 million unique video streams a month, according to ComScore.

The deal gives AOL more scale in video, and more video ad inventory to sell. "AOL is building a video ecosystem for the next decade," CEO Tim Armstrong said in a statement. "5min Media is the perfect complement to our powerful video capabilities -- it provides a missing piece in the AOL value chain that completes our end-to-end video offering from content creation through syndication and distribution to the consumer experience and monetization."

A person close to the deal told Ad Age that AOL had been looking at startups like 5Min and a how-to video producer like Howcast in order to build scale in video, the fastest-growing area of online advertising. AOL has $600 million to invest, and is looking to make deals in the $50 million range.

AOL's video search engine Truveo is part of the company's ventures unit. 5Min was founded in 2006 and raised $13 million from Spark Capital and Globespan Capital Partners.

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