Web portal AOL said it has agreed to buy Tacoda, a company that delivers targeted ads based on a visitor’s browsing habits.

It is the latest move by Web giants to buy up companies that help them boost advertising, and reflects AOL’s move to rely more on advertising revenue amid a plunge in paying subscribers.

The amount was undisclosed, but the NY Post is putting it at $200 to $300 million. [Update: Dow Jones is using the $300 million number, but this is also unattributed, so no firm conclusions yet.]

AOL, the online unit of Time Warner Inc., said the acquisition of Tacoda would help advertisers run more relevant pitches. Visitors who read a lot on new car models, for instance, will find automotive ads following them to Web pages on baseball. (AP has the story here).

Tacoda had raised a total of $33 million of financing since 2001 from Rho Ventures, Union Square Ventures, Masthead Venture Partners and Hanseatic Americas. Union Square’s Brad Burnham provides the back-story, about how Tacoda founder Dave Morgan followed Burnham into a cocktail party in his shorts in order to dog him for money.

Customers include About Inc., BusinessWeek.com, Dow Jones, the Albany Times-Union.com, USA Today and Weather.com.

Venture capitalist Jeremy Liew just wrote a column for VentureBeat noting how niche sites will do well, because of these new targeted advertising technologies.


VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative technology and transact. Our site delivers essential information on data technologies and strategies to guide you as you lead your organizations. We invite you to become a member of our community, to access:
  • up-to-date information on the subjects of interest to you
  • our newsletters
  • gated thought-leader content and discounted access to our prized events, such as Transform 2021: Learn More
  • networking features, and more
Become a member