Millennial Media Files for $75 Million Initial Public Offering

January 06, 2012, 4:55 AM EST By Olga Kharif

Jan. 5 (Bloomberg) -- Millennial Media Inc., the second- largest mobile-advertising company in the U.S., filed for a $75 million initial public offering.

The Baltimore-based company hired Morgan Stanley, Goldman Sachs Group Inc. and Barclays Plc to manage the IPO, according to a regulatory filing today. Millennial didn’t specify the number or price of shares it will offer in the filing. The size is a placeholder amount used to estimate registration fees and may change.

The IPO may value the company at $700 million to $1 billion, a person with knowledge of the matter said in May. Millennial makes money by helping advertisers reach devices such as smartphones. It’s increasing its market share even as it vies with technology giants Google Inc. and Apple Inc., having carved out a niche by serving ads to different manufacturers’ phones and offering an alternative to larger ad networks.

“That’s a momentous step for Millennial,” said Karsten Weide, program vice president at research firm IDC. “It will give them the money to compete on a more equal footing with Google, and potentially expand internationally. It’ll allow Millennial Media to expand its market share and it would probably be at the expense of Apple.”

Gaining Ground

Millennial gained ground last year in the U.S. mobile- advertising industry, according to Framingham, Massachusetts- based IDC. The firm projected that Millennial would end 2011 with 17 percent of the market, compared with 15 percent a year earlier. Google’s share was projected to reach 24 percent, compared with 19 percent in 2010, keeping it in first place. Apple, meanwhile, was projected to slip to third place with 15 percent of the market, compared with 19 percent in 2010.

For the nine months through Sept. 30, Millennial’s revenue more than doubled to $69.1 million from $29.1 million. The net loss in the period narrowed to $417,000 from $5.4 million, according to the filing.

Millennial’s backers include Charles River Ventures, Columbia Capital, Bessemer Venture Partners and New Enterprise Associates Inc. On May 12, the company announced that BroadSoft Inc. Chief Financial Officer Jim Tholen had joined its board. He helped guide BroadSoft to an IPO in 2010.

Proceeds will be used for general corporate purposes, including international expansion and product development, according to the filing.

Apple recently hired Adobe Systems Inc. executive Todd Teresi to lead its iAd mobile-advertising business, according to people with knowledge of matter. The iAd business, introduced in 2010, is Apple’s attempt to parlay its leadership in consumer electronics into mobile-advertising revenue.

--Editors: Elizabeth Wollman, Jillian Ward

To contact the reporter on this story: Olga Kharif in Portland, Oregon, at okharif@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles@bloomberg.net

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