Marketecture: Get Smart. Fast.
00:23:25 · Ari Paparo, Alex Cone, Eric Franchi
[00:23:25] S0: Alright. I think that's a great place to finish. So this is really interesting. The CrUX or Crux Chrome User Experience Report. How can people access? What's the quick way for... If someone's listening and doesn't know how to get this stuff? [00:23:39] S2: Yeah. So on developer.chrome.com, there is now a section called ads. Oh, wow. Look at that. And that is like the home page for these metrics right now. But we've... There's other things in in the browser that we do around ads. So we'll start, like, in terms of just like giving developers tools. So you'll start to see more stuff there, but it is developer.chrome.com, and then you find the little ads tab. [00:24:09] S0: Sounds great. I'm gonna check it out. So Alex Cone, thanks so much for joining us. [00:24:13] S2: Yeah. Thank you, guys. It was great to join again. [00:24:15] S0: Yeah. And we'll be back with a ton of news, including a lot of earnings reports from m and a and stuff like that. So please, stay tuned. Alright. [00:24:24] S1: Welcome back, everybody. We are here with the news of the week. And my god, there's a lot of news. It's just our Emmy. Alex dropped off. So let's get into it. We wanna start with earnings. We wanna start with a m and [00:24:40] S0: Let's do m and a first. [00:24:42] S1: M and a. Okay. Okay. I like it. So two deals this week to talk about. The first is a company called Affle. [00:24:51] S0: I don't [00:24:52] S2: know. Never heard of them.
00:24:52 · Alex Cone, Eric Franchi
[00:24:52] S2: know. Never heard of them. [00:24:53] S1: I think it's Affle, a f f l e. We're gonna go with that. Sure. Okay. Company called Affle, which is an India based, it's called a holdco, but not an agency holdco, kinda like a, you know, a holding company for for technology and software. Largely focused on mobile, largely focused on performance ad tech is acquiring Perion. Perion is a Israeli based, but largely US focused. Not quite a holdco, but, you know, sort of kind of a diversified ad tech company that larger focuses on CTV, digital out of home, retail media, was the acquirer of my company Undertone about ten years ago, and was a public company. So another public company taken off the The acquisition was a $420,000,000 purchase price. So, you know, somewhat scaled. But if you take account into effect two things into account, it's probably worth diving into, as far as the state of the market. So number one, Perion was about 420,000,000 revenue, you know, on a trailing twelve months, right? So effectively one x revenue, But Perion had $200,000,000 cash on the books. So heavily discounted from a purchase price. Thesis here is pretty solid. Like, you know, it's a one plus one equals two type of play. Affle seems to be mobile performance. Perion is a lot of brand based stuff. Perion brings US distribution to, you know, a non US company. I I buy it, but certainly this is a consolidation play.
00:26:28 · Ari Paparo
[00:26:28] S0: Yep. So we had Steve Yap on the pod about a year ago. He was the CRO of Perion at the time. He's not anymore. And they were talking up, you know, unification, having a single UI and single AI across all their properties because they have web, they have digital at home, they have connected TV, they have a viable spots on each of the major sectors. So it seems like a pretty good deal for the buyer to be able to get into all those markets all at once instead of having to cobble it together, which is quite hard. It's also a buyer that, as we said, no one's heard of. So, like, getting into The US and European markets on the back of a pretty well known company, Perion. And Perion itself has had some problems. Like, about a year and a half ago, they got involved pretty heavily in the made for advertising MFA scandals. They had a division that, like, basically just created MFA sites for people. So there's a little hair on Perion, and looks like Affle is taking advantage of the pricing. One thing about Affle is I've heard it described as, like, Verve from India as more or less. Like, I think I think... Now I should have double checked this, but I think the CEO of Affle used to be the CTO of Verve or some... There's some connection between the two. But I may be wrong so people could correct me. But, yeah, it feels like, there's something going on here to to create a new kind of ad tech company.
00:27:53 · Eric Franchi, Ari Paparo
[00:27:53] S1: Yeah. I caught a stray on this one, and I do not deserve to be catching a stray, by the way. So so I I, there's a lot of posts about this. You know, I think people are already focused around price and then... Another buy in. Somebody said, oh, the the the former undertone investors, have to be disappointed here. Was like, dude, we sold the thing ten years ago. We sold it, you know, for a great multiple. I'm I'm good. And I didn't publicly comment, you know, it's just not my style, but I didn't think that we should have caught a Did you... [00:28:25] S0: Well, two questions. What what was the undertone price? It's been ten years. You really can disclose it. And secondly, what... Did any of the investors keep the equity in Perion? [00:28:38] S1: To do the tone price was public. It was a 180,000,000. It was on a on a multiple of EBITDA at the time. It was it was good. We we were happy with it. The undertone investors did very well and kind of... We'll get into that. But we fully sold the company. Whoever had stock options, frankly, stock options throughout the, you know, the next five years or so during that whole kind of like COVID bump, you... If you stayed, you you you could have done well. But now there was there was no equity as part of it. [00:29:10] S0: Alright. Then there's nothing to complain about. [00:29:12] S1: No reason for me to catch this straight. [00:29:14] S0: Do we know how much, Perion was exposed to Open Web? Was it still the majority of their business? Because I think that's the real that's the real story of 2027... 2026 right now.
00:29:14 · Ari Paparo, Eric Franchi
[00:29:14] S0: Do we know how much, Perion was exposed to Open Web? Was it still the majority of their business? Because I think that's the real that's the real story of 2027... 2026 right now. [00:29:24] S1: I I saw that. They... My sense is they were super diversified. So CTV, they acquired a a digital out of home company called High Stack, which I think is Yeah. Know, it was... Was all move. Yeah. Yeah. Yeah. I think they acquired some RMN. So I think of all the kinda, like, publicly traded ad tech, they probably are quite diversified, but I I don't know. [00:29:48] S0: Yeah. They also had like a search our business that... Another thing that hit them was that they had some reseller arrangement with Bing, and I think that also is a probably a flat to down business. [00:29:59] S1: Yeah. That was the original stray that I caught by the way. When Perion acquired Undertone, you, my friend Me? Said something to the effect of, I will remember this tweet until the day I die. Some of this is like, not gonna I'm not gonna click on this because my my my browser is gonna get hijacked or something like that. It was quite good. We could go into the archives 12/01/2015. Anyway... But, yeah, that was that was the legacy [00:30:25] S0: Okay. That
00:30:25 · Ari Paparo, Eric Franchi
[00:30:25] S0: Okay. That [00:30:25] S1: was the legacy business of Perion, which gave him the cash to acquire Undertone and started this whole thing. Let's move on. Oh my god. This isn't about me. But this is about me. I was kidding. So Rembrandt, a portfolio company of, of our firm, they merged with a company called Whisper World. So Rembrandt, if you don't know, they do they do a few things. They acquired Spaceback, but effectively what they do is they use AI to do virtual product placement in existing videos. These could be, like, sitcoms from the nineties. They could be movies. They could be creator videos. Super cool stuff. This is very, very hard to scale for a number of reasons per... Particularly for professionally produced content. Whisper World kinda solve that legacy problem with standardization. They're... Another one, you know, non US. It's, it's quite a scaled business. They've been doing this for for some time, not well known. But this is one, again, from an insider perspective, is very complementary in terms of taking, like, you know, something that is scaled with scan... Standardization, bringing in, like, great AI. I am excited about this deal, and it is a merger.