On Tuesday, Yahoo announced that it had agreed to acquire BrightRoll, a platform for selling and delivering video advertising, for $640 million in cash.
The deal is Yahoo’s second-largest purchase — behind its $1.1 billion acquisition of Tumblr last year — since Ms. Mayer joined Yahoo as chief executive in mid-2012.
In a Tumblr post discussing the acquisition, Ms. Mayer said the purchase would “dramatically strengthen” Yahoo’s video advertising platform by giving marketers an easy way to buy video ads, in real time, across many sites.
But she also reiterated her pledge, made last month, to return a large portion of the Alibaba proceeds to shareholders. She said that Yahoo was still exploring ways to dispose of its remaining stake in Alibaba in a way that minimized the amount of taxes owed on the sale.
Brian Wieser, an advertising analyst with Pivotal Research, said the deal was exactly the kind of strategic purchase that Yahoo should be making. “And they got it at what seems to be a pretty good price,” Mr. Wieser said.
TechCrunch, a technology news blog, reported last month that the merger talks were occurring.
Yahoo has made video a crucial portion of its strategy to attract more users to its websites and mobile apps. It has commissioned original video series and struck a deal with the concert promoter Live Nation to stream one performance a day on its site.
The company has also sought to improve its position as an advertising network, delivering targeted ads on other companies’ websites and apps.
BrightRoll is one of the leading companies delivering video ads using an instantaneous computerized matching process. Such programmatic video ads are one of the hottest areas in the already sizzling category of digital video advertising, which is expected to total about $5.96 billion this year in the United States, according to the research firm eMarketer. Programmatic video currently accounts for about 12 percent of video advertising, but eMarketer predicts that it will account for 40 percent of digital video ad dollars in 2016.
Yahoo is in some ways playing catch-up with its competitors. AOL acquired Adap.TV last year to give it similar video ad capabilities, and Facebook recently acquired LiveRail to do the same.
Yahoo said that BrightRoll was a large, growing and profitable business with net revenue expected to exceed $100 million this year, and the deal should add to Yahoo’s profits from its core operations.
Scott Burke, Yahoo’s senior vice president for advertising technology, said the BrightRoll deal would allow Yahoo to add video to the suite of display, native and mobile ads that it is offering marketers.
“We’re trying to make it easy for the advertiser and the agency to buy across all platforms,” he said in an interview.
BrightRoll allows marketers to target ads by age, geographic area and other traits, its chief executive, Tod Sacerdoti, said. For example, he said, in the run-up to last week’s elections, candidates and their supporters used the technology to buy ads aimed at particular groups of likely voters.