Telstra purchases control of video analytics platform Ooyala for US$270m

Telstra CEO David Thodey says deal allows telco to provide personalise video content streaming and advertising to customers

Telstra is set to bring more personalised video content and advertising to customers after spending US$270 million (AUD $291m) on boosting its stake in Silicon Valley-based video analytics platform provider, Ooyala, to 98 per cent.

The deal announced today is culmination of several years of investment by the ASX-listed telco into the video streaming and analytics business. Telstra previously owned a 23 per cent stake in the business, investing US$61million over the past two years.

The latest acquisition is subject to certain listing conditions and regulatory approval but is expected to be completed in the next 60 days.

In a statement, Telstra CEO, David Thodey, said the deal will help the telco giant become a world-leading personalised video platform company.

“Ooyala enables broadcasters, operators and media organisations to deliver digital TV and video content, across any device to mass audiences, using analytics to provide recommendations, personalised content and advertising to the end user,” he said.

“Ooyala delivers a personalised video platform as an end-to-end cloud solution service, which saves customers high upfront investments in online video infrastructure and helps increase the return on their content. Our investment allows Ooyala to take its solution to the next level and thereby further accelerate its growth.”

Ooyala was founded in 2007 and has 330 employees. According to Telstra’s statement, it is forecasting revenue of US$65m for the 2014 calendar year. Current customers include Telstra, ESPN, Foxtel, Univision, Dell, News Corp, Sephora and The Washington Post.

Company president and CEO, Jay Fulcher, will stay in his current role, with Ooyala becoming a subsidiary of Telstra and operating as a standalone business. It will retain its branding, structure and management under the telco’s global applications and platforms group.

Fulcher said thanks to the work between the two companies over the past two years, they shared an aligned vision around how to deliver the next generation of personalised cloud TV and video services.

“Telstra’s acquisition validates both the scale of the global market opportunity and our data-centric strategy for helping our customers win as the industry transforms,” he stated. “This investment will help us accelerate our growth and cement our lead as the most innovative and forward-thinking cloud TV and video platform company in the world.”

Thodey noted the rise of TV and video consumption across an ever-increasing pool of devices and said the systems and platforms for managing, distributing and monetising these services will continue to evolve.

Related: How Telstra united TV and digital analytics

“This provides an opportunity for Telstra and Ooyala to establish a consolidated leading global company to deliver platforms and services on which the next generation of TV and video will be built,” he stated.

“Telstra’s global customer relationships, our established presence in Asia and proven integration capabilities, combined with our expertise in online video and investment in Foxtel, provide us a unique opportunity to succeed in this growth market.”

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