Facebook has acquired video ad tech startup LiveRail for an amount ranging from $400 million to $500 million to beef up its own video ad service, according to a source.

Although Facebook itself has not disclosed the financial terms of the acquisition, a source cited by TechCrunch said the startup sold for $500 million. The social media giant said it will keep LiveRail alive and use the latter's features to expand its share in the video advertising market.

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Founded in 2007, LiveRail now has a wide client base that includes Major League Baseball, A&E Networks, ABC Family, Dailymotion, and Gannett. The startup helps publishers earn money through relevant and targeted ads.

Last year, LiveRail told TechCrunch it was on its way to make $100 million in revenue and was planning to go public in late 2014. However, the initial public offering (IPO) was pushed back as Facebook came along with an apparently better offer.

LiveRail's biggest traction in the ad market is its real-time bidding platform that can assess publishers' video ad inventory and determine the best ad opportunities for its clients based on the given budget. Its links with marketers and publishers can be leveraged by Facebook to become an ad powerhouse in both web and mobile markets.

The startup's Checkpoint technology is also a winning catch for Facebook, as this feature prevents kids from seeing ads for age-limited products such as liquor and tobacco. LiveRail also has a data management system that predicts the trajectory of a video ad inventory to assist ad buyers in their campaign decisions and help publishers determine the best content that can give them the highest rates.

Facebook had officially unveiled its Facebook Audience Network mobile ad network in May at f8. This network allows mobile apps to work with Facebook's custom and native ads.

The two companies could later on work together to integrate targeted video ads to different kinds of mobile apps. Facebook could also use LiveRail's expertise to play targeted movie trailers and video ads on Facebook itself.

TagsFacebook LiveRail acquisition