The FINANCIAL — AOL Inc. has entered into an agreement to acquire Gravity, one of the leading companies in multi-screen content optimization and personalization and the company that created the Interest Graph, according to AOL Inc.
Gravity personalizes the Internet beyond search and social by applying a personal and real-time filter to the ever-growing volume of digital information available for consumption. Gravity's patented technology creates Interest Graphs based on individuals' interests, preferences and habits and allows publishers to offer a tailored and relevant selection of editorial and advertising content to readers.
Gravity's technology will act as an accelerator in virtually all areas of AOL's strategy to create more engaging, relevant and valuable experiences for its consumers, advertisers and publisher partners, according to AOL Inc.
"The web is moving to the era of personal, and a personal web filter will reshape how consumers get information and services," said Tim Armstrong, AOL Chairman and CEO. "Gravity is joining AOL to lead the personalization transformation of AOL's brands and platform partners," he added.
"Every day we're presented with an overwhelming amount of information to consume on our favorite websites and apps," said Amit Kapur, Gravity CEO. "It's time to move beyond searching for the best content to having the best content search for you. We believe that by combining AOL's vast brand, publisher and advertiser network with Gravity's interest graph technology, we can do just that," Kapur added.
Gravity will bring to AOL a client base of top publishers and brands such as Sony, Intel, USA Today and GAP. Since the launch of the Gravity API last year, there have been more than one billion personalized page views per month on some of the biggest publisher sites on the web, and its technology has increased engagement by 240% compared to sites that do not have personalization, according to AOL Inc.
AOL has agreed to acquire Gravity for a closing purchase price of approximately $83 million. An additional $7.7 million of consideration will be deferred and paid over two years following closing. As part of the transaction, AOL will acquire approximately $12 million of net operating losses, which is expected to result in a future cash tax benefit to AOL of approximately $5 million. AOL expects the acquisition to close in the first quarter of 2014, according to AOL Inc.
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