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Boston: Yahoo has purchased Maven Networks, an Internet video toolmaker, for $160 million.

Press Release: http://biz.yahoo.com/bw/080212/20080212005624.html

Maven, located in Massachusetts, sells video-publishing systems and tool sets that allow companies play, distribute and syndicate broadband video. The acquisition will be an upcoming age for the advertising sector, which will be generating more than $4 billion in annually within the next three years.

Hilmi Ozguc, the chief executive of Maven said “Internet video, which was initiated by a group of start-ups, is now on the edge of becoming a big business.” This business raised about $30 million in venture capital since 2002. “Billions of dollars in advertising are at stake.”

Will Richmond, the President of Broadband Directions, said about the deal: “It’s a confirmation of Maven’s tactic of concentrating on the ad-supported part of the broadband market. At a wider level, it’s a confirmation of the broadband video market as a whole. I think it’s an excellent fit for both companies.

The talks between Yahoo and Maven had begun even before Microsoft made its unsolicited $44.6 billion bid for Yahoo.

Maven will be operating as a subsidiary of Yahoo. “I and the entire Maven employees will be working with video engineers and its video hub at Yahoo’s headquarters, in Sunnyvale, California, to improve and assimilate Maven technology. Yahoo is interested to invest in Maven and expand it” said Ozguc, the chief executive of Maven.

Yahoo will be using Maven’s technology not only for its news, entertainment and sports Web sites but it will be also marketing to other companies. Media giants such as Fox News, CBS Sports, Sony BMG, The Financial Times, Hearst and Gannett are using Maven’s technology to broadcast and distribute videos and also for identifying the right moment to show an ad during a video.

“Maven will be concentrating on doing the best, just like now” said Becca Paoletti, the director of Yahoo’s video strategy sales. “We’re going to utilize their technology to enhance our video capabilities and to market other video publishers.”

Adam Barry, the senior vice president for marketing and strategy, a Maven competitor, commented on Yahoo-Maven alliance, that his company was “looking forward to grow as a strong independent company in 2008.”

If Microsoft succeeds in the take over of Yahoo, the Maven technology will be an important tool and asset for Microsoft to catch up with Google in Internet search and online advertising.

The acquisition would help yahoo to market and deliver video ads not only for its own site but also for other companies across the Web. Yahoo has a strategy to offer its ad-selling services to Maven’s media clients.

“We really consider this tie-up with Maven as a great opportunity to produce a healthiest video platform in the sector,” said Hilary Schneider, the executive vice president of the Yahoo.

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