Driving more consolidation of the video search and recommendation market, Rovi Corp. has put up $62 million in cash to acquire Veveo, a firm that has developed a voice-based video personalized search platform that’s already in use by several major pay-TV operators.
Rovi, which is on the hook for an additional $7 million in cash based on hitting certain agreed-upon milestones, said Veveo will play an important roll in its next-gen navigation products.
Rovi has spent the last 18 to 24 months using its own analytics and metadata systems to build out new search and recommendations features for its interactive guide products for operators and CE partners, and believes Veveo and its natural language processing platform will “complement and leapfrog” that work, said John Moakley, Rovi’s EVP, data solutions. He said Rovi’s early work around enhanced search and recommendation capabilities has already yielded deals with a “major “ CE provider and a tier-1 MSO.
Founded in 2004, Andover, Mass.-based Veveo has already built a customer roster that includes AT&T, Verizon Communications, Nokia, DirecTV, Cablevision, Comcast and Rogers Communications. Veveo became profitable in 2012, and has raised $28 million over its lifespan. “We’ve been steadily growing the business,” Daren Gill, Veveo’s chief product officer, said Veveo chief product officer Daren Gill, who believes the deal with Rovi will help to scale up deployemnts of Veveo’s voice-based platform.
All of Veveo’s 60 employees are expected to join Rovi when the deal closes in the next 30 days. The deal will also net Rovi intellectual property that includes more than 50 granted patents, plus another 80 that have been filed.
Moakley said Rovi has kicked off its integration planning and expects to have more specific details to share on how Rovi will stitch in Veveo’s platform by The Cable Show, set to run from April 29-May 1 in Los Angeles. The expectation is that Veveo will be accretive to Rovi’s business by 2015, he said.
Veveo, which counts Nuance Communications among its competitors, introduced a modularized version of its next-gen platform last June that can be plugged into third-party search and recommendation systems. It relies on a contextual, conversational-based, knowledge graph system to generate search results.
M&A activity has begun to heat up in the video search and recommendations market as companies look to develop more integrated platforms for pay-TV partners and retail CE companies. Of recent note, TiVo struck a $135 million deal for Digitalsmiths late last month.
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