AOL Buys Ad Software Company Pictela

Portal Gets Rich-Media Capabilities for Big, Interactive 'Project Devil' Ads

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NEW YORK ( -- AOL acquired ad software company Pictela for an undisclosed sum. The New York-based ad company helps clients such as Neiman Marcus and Infiniti create the so-called rich-media advertising banners and boxes that feature high-definition video and content-sharing tools through Twitter and Facebook.

Pictela ad for Neiman Marcus
Pictela ad for Neiman Marcus
The acquisition is part of AOL's ongoing strategy to offer bigger and bigger ad units, a way to appeal to TV ad dollars that online publishers have long coveted. AOL had recently launched its "Project Devil" unit that takes up more than half the screen.

"Pictela is very similar philosophically with Project Devil," said AOL President of Global Advertising Jeff Levick. The Pictela acquisition is his first major deal in his new role at the company. "We're going down a path of what we believe is reinventing a next ad unit for display.

Pictela was founded in late 2008 and was capitalized at $3.5 million through Avalon Ventures and investor Dave Morgan.

AOL has made a series of notable acquisitions lately, including StudioNow, 5min Media, TechCrunch and Thing Labs, all of which play into CEO Tim Armstrong's strategy of unique content bringing in brand advertising, as opposed to the long-tail re-marketing dollars that make up most of the online advertising world.

Still, the portal company has had a difficult year, turning in lower revenues quarter to quarter, and Mr. Armstrong said he doesn't expect the company to turn a corner until late 2011.

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