Tremor Builds War Chest

With its latest venture funding of $37 million, Tremor Video has now amassed $115 million. According to CEO Bill Day, half of that cash is slated toward acquisitions.

That could mean another round of consolidation for the video ad network space. Tremor already snatched up rival ScanScout last November, right around the time that Specific Media nabbed the video network pioneer BBE. Tremor could move to lock down one of the other remaining video network players, such as YuMe, which would provide Tremor with some premium relationships, such as a NBC Universal site or BrightRoll. But there is so much duplication in this space; it’s hard to see what the combination of two more network giants would accomplish.

Instead, Tremor could expand its portfolio beyond the network business. Day himself is talking up the company’s analytics, but perhaps it will move to make sure it has access to high-quality content. Acquiring Digital Broadcasting Group might be slightly more attractive if Tremor wants to further “premiumize” its sales offering. The company has a pipeline of original content as well as distribution channels that Tremor lacks. Shows like the Kiefer Sutherland vehicle “The Confession” may have fallen short of breakout-hit status, but that sort of fare would certainly bring higher-quality reputation to Tremor, which is known for bulk inventory and mass scale as much as anything. Is DBG for sale? The promise of an IPO might make CEO Chris Young open to talking. Or if Tremor wanted to really expand into the original content arena, maybe a studio like Vuguru makes sense.

However, in announcing its funding news, Tremor’s comments were revealing. Day spoke of the company’s future as an analytics company. Is Tremor moving out of the online video network space, at a time when the dollars in the category are blowing up? You have to wonder whether there is a more attractive business in analytics than advertising. We’ve already seen video analytics firms like TubeMogul evolve into ad networks themselves, presumably because that’s where the money is. What’s Tremor’s plan? Is analytics where the business is ultimately headed, or a smokescreen to dress up the company’s core mass-network foundation? It will be interesting to watch going forward.

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