AT&T is buying buy digital ad firm AppNexus

  • AT&T has purchased digital ad firm AppNexus for an undisclosed amount.

  • The transaction is planned to close during the third quarter of 2018.

  • That likely signals that the company's plans to challenge advertising titans Google and Facebook.

AT&T has agreed to a deal to buy digital ad firm AppNexus.

The terms of the deal were not disclosed but the Wall Street Journal reports that the acquisition could cost around $1.6 billion. The transaction is planned to close during the third quarter of 2018, per AT&T.

The deal could also pave the way for future acquisitions in technology and content as AT&T assembles a strong tech stack to compete for more market share in advertising.

"Ad tech unites real-time analytics and technology with our premium TV and video content," said Brian Lesser, CEO of AT&T advertising and analytics, in a statement. He added:

"So, we went out and found the strongest player in the space. AppNexus has scale of infrastructure, advanced technology and diverse talent. The combination of AT&T advertising and analytics and AppNexus will help deliver a world-class advertising platform that provides brands and publishers a new and innovative way to reach consumers in the marketplace today."

Given Lesser's background, the move isn't exactly shocking. Before joining AT&T, Lesser built out the programmatic business at WPP and was an instrumental player in the holding company's partnership with AppNexus. Lesser also formerly sat on AppNexus' board.

"Since AT&T hired Brian Lesser, it's been somewhat of an open secret that AT&T would acquire AppNexus to accelerate its advertising ambitions given the close partnership he had with the company in his prior roles at WPP," said DataXu CEO Mike Baker. "AppNexus would provide AT&T with a lot [of] ad-tech expertise and scaled global technology."

In terms of both technology and content, the AT&T-AppNexus deal could give the telecom giant a run at stealing money from Facebook and Google while also pulling some budgets from television, said Mark Douglas, CEO of ad-tech agency SteelHouse.

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