AT&T Deals Keep Coming With Move to Buy Ad Platform AppNexus

(Bloomberg) -- AT&T Inc. agreed to buy online ad exchange AppNexus as Chief Executive Officer Randall Stephenson aims to turn the TV-and-wireless giant into a media conglomerate following its $85 billion acquisition of Time Warner Inc.

AppNexus, which runs a global advertising marketplace that matches ads to users’ viewing interests, will become part of AT&T advertising and analytics, according to a statement Monday. Financial terms of the deal weren’t disclosed.

Similar to Verizon Communications Inc.’s recent focus on media, AT&T is betting advertising will become a pillar in its plan to build itself up beyond just a set of telecom pipes. AT&T took over Time Warner a little more than a week ago after a drawn-out antitrust battle. The Time Warner deal, originally announced in 2016, will let AT&T offer wireless data and entertainment content matched with ad technology to extract some of the revenue that has been going to companies like Alphabet Inc.’s Google and Facebook Inc..

“Here comes telecom to the advertising fish bowl!” Jennifer Fritzsche, an analyst with Wells Fargo Securities LLC, wrote in a note Monday. “While AT&T and Verizon are still minnows in this bowl compared to the two big fish of Facebook and Google, they are staking their claims to build their assets to be better able to compete. ”

Stephenson outlined his plan to build and acquire ad technology at an investor conference Thursday.

“This is going to be a 24-month time horizon kind of thing” to get the advertising business going, Stephenson told investors at the conference, signaling that there may be more deals to come in this area. “This will probably require some level of M&A. But it’s not going to be big M&A. This is going to be smaller M&A.”

Last week, AT&T also agreed to sell data-center operations to Brookfield Infrastructure for $1.1 billion, and is reportedly preparing to acquire the portion of Otter Media that it doesn’t already own.

AT&T shares were little changed at $31.65 as of 9:44 a.m. in New York.

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