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Here’s How AT&T Will Be Taking on Google and Facebook

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AT&T has agreed to acquire AppNexus

AT&T (T) said on June 25 that it had agreed to acquire AppNexus, an ad tech company, for an undisclosed amount. The deal is expected to help the carrier support its recent acquisition of media content through Time Warner.

The acquisition will also help the telecom (telecommunications) giant take on the duopoly of Facebook (FB) and Alphabet’s (GOOG) Google in the digital ad business. According to eMarketer, at 31.7%, Google had the lion’s share of the $232.3 billion spent globally on digital ads in 2017, while Facebook had a 17.9% share.

Why AppNexus could prove to be an important acquisition for AT&T

AppNexus’s technology helps advertisers purchase online ads using automated software and helps publishers connect ads with ad placements so that audiences can see them. The company also helps measure ad engagement and optimize ad performance.

Like other major telecom companies, AT&T has been trying to improve its ad business in addition to its core business, which has seen sluggish growth. The ad business offers opportunities for telecom companies to grow their revenues through the massive pools of customer data they possess.

AT&T stock rose 0.3% in the early hours of trading on June 25 despite the S&P 500 Index’s tanking 1.4%.

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