AT&T buys AppNexus, extends into ad tech after Time Warner purchase

The deal is really about digital TV advertising and trying to thwart the ad dominance of Google and Facebook.

AT&T said it will acquire AppNexus, an ad-tech company, in a bid to build a digital advertising juggernaut to go along with its Time Warner purchase.

Under the deal, AppNexus will become part of AT&T advertising and analytics. Brian Lesser, CEO of AT&T's advertising and analytics unit, had been the CEO of GroupM and an AppNexus board member.

AT&T's move rhymes with what Verizon is trying to do in digital advertising. Verizon acquired AOL and Yahoo to create Oath. The idea is to meld digital advertising with video content and mobility. AT&T's purchase of AppNexus indicates that the company wants to better compete for ad dollars against Facebook and Google and be more of a resource for chief marketing officers.

AT&T wraps up $85 billion Time Warner acquisition

AT&T said it will integrate AppNexus' team of product managers and software engineers and their know-how. Lesser said that AppNexus tools will be used to create digital TV ad products. AppNexus will continue to be an ad platform for brands and publishers.

The plan or AT&T is to combine its first party data, content and distribution with the AppNexus platform globally.

AT&T said the deal is expected to close in the third quarter. Terms of the deal weren't disclosed, but The Wall Street Journal previously reported the price at $1.6 billion.