Media conglomerate Cox Enterprises Inc., betting its future on Internet advertising as newspaper and television audiences shrink, plans to spend $300 million to buy a startup that helps Web sites pool their ad space.
The all-cash deal with Adify Corp., to be announced Tuesday, represents the latest evolution for a media company that began more than a century ago with one newspaper in Dayton, Ohio. As new technologies emerged, Cox expanded to include radio, television and cable systems across the country.
“We’re absolutely convinced at Cox that online revenue is continuing to grow,” John Dyer, Cox executive vice president for finance, told The Associated Press. “If you look at Cox’s history, we’ve not necessarily been the first into a space. … But we’ve prided ourselves in the course of history in being early investors.”
With Adify, Cox gets a technology platform that can help Web sites more successfully sell higher-priced ads targeted to specific audiences, such as parents or travel enthusiasts, keeping brand-name advertisers from fleeing to larger Internet companies like Google Inc. and Yahoo Inc.
Marketers wishing to reach a targeted audience may find a particular media Web site lacking enough ad space to sell. Adify helps media companies form networks of Web sites around parenting, travel and other topics, allowing marketers to reach readers on dozens or hundreds of like-minded sites through a single buy.
Adify already runs several ad networks, including a lifestyles-focused one for Martha Stewart Living Omnimedia Inc. and a network of hundreds of independent financial blogs assembled by the online unit of Forbes Inc.
Cox is exploring its own specialty ad networks around such Web properties as cable TV’s Travel Channel, the AutoTrader.com classifieds site and the Kudzu local search portal.
Russ Fradin, who will continue to run Adify, said Cox was initially in talks with Adify to launch such networks…