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Telstra takes control of video streaming company Ooyala

A US$270 million investment will take Australian telecoms giant Telstra's share from 23% to 98%.
Written by Rob O'Neill, Contributor

Telstra is acquiring Silicon Valley-based video streaming and analytics company Ooyala with a US$270 million investment.

Telstra invested US$61 million in Ooyala over the past two years for a 23% stake. The extra US$270 million will deliver full control with 98% of the company's shareholding.

Telstra CEO David Thodey.

The investment is the first for Telstra's Global Applications & Platforms group, which aims to create growth in global markets "adjacent to Telstra’s core business and where software disrupts traditional business models", Telstra announced to the Australian Securities Exchange.

The transaction is subject to closing conditions and US regulatory approval.

Telstra chief executive David Thodey said the controlling stake in Ooyala would help build it into a world-leading personalised video platform company.

“Ooyala enables broadcasters, operators and media organisations to deliver digital TV and video content, across any device to mass audiences, using analytics to provide recommendations, personalised content and advertising to the end user,” Thodey said.

Ooyala provides solutions for broadcasters, pay-TV operators and online media sites globally, he said. Aside from Telstra, Ooyala's customers include ESPN, Univision, Telegraph Media Group, Dell, Sephora, Foxtel, NBC Universal, Comedy Central, News Corp and The Washington Post.

Ooyala delivers a personalised video platform as cloud service, Thodey said. This saves customers high upfront investment in video infrastructure and helps increase the return on their content.

“Telstra‘s global customer relationships, our established presence in Asia and proven integration capabilities, combined with our expertise in online video and investment in Foxtel provide us a unique opportunity to succeed in this growth market,” he said.

Ooyala Chief Executive, Jay Fulcher will continue in his current role and Ooyala will operate as an independent business under Telstra's Global Applications and Platforms group.

In a blog post Fulcher told employees the buyout would "catapult Ooyala from innovative online video start-up to market-leading cloud TV juggernaut".

"Our strategy for leadership in this market is now backed by Telstra’s full-throttle commitment to establishing an independent, world-leader in cloud-based personalized TV and video technology," he said.

Backing from Telstra will allow Ooyala to "double-down" on key investments, he said, by accelerating our hiring, deploying innovations and teaming with new global partners.

Ooyala was founded in 2007, has 330 employees and is forecasting revenue of US$65m for 2014.

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