Facebook is in talks to purchase a video advertising firm called LiveRail for close to $500 million.
LiveRail is responsible for putting ads onto videos and Facebook believes that by controlling the service, they can give users more relevant ads, thereby increasing clicks and revenue.
It is not yet clear exactly what Facebook plans to do with LiveRail, but it could be that all videos posted to the social media site will soon come with mandatory advertising. Alternatively, Facebook could be working it into a new app.
Brian Boland, vice president of ads product marketing and atlas at Facebook commented that “LiveRail, Facebook and the premium publishers it serves have an opportunity to make video ads better and more relevant for the hundreds of millions of people who watch digital video every month.”
Boland continued that, “more relevant ads will be more interesting and engaging to people watching online video, and more effective for marketers too. Publishers will benefit as well because more relevant ads will help them make the most out of every opportunity they have to show an ad.”
LiveRail started back in 2007 and has worked with customers such as ABC Family, Dailymotion and Major League Baseball. The company claims to reach around five billion impressions each year.
The video advertising market has been rapidly growing in recent years and has increased by 42 percent since 2013. It is expected to generate around $5.96 million this year.
Facebook has failed to comment about the acquisition but sources say the deal could be done by next week.