Yahoo continues to focus on its advertising business, announcing Tuesday that it has purchased digital ad startup BrightRoll for $640 million in cash.

The acquisition follows a month after Yahoo was rumored to be in negotiations with BrightRoll, according to Fortune. The goal for the Sunnyvale, California-based internet giant is to have BrightRoll produce more than $100 million in 2014.

As part of the deal, the startup's 400 employees will become part of Yahoo's digital video advertising team.

"Here at Yahoo, video is one of the largest growth opportunities, and BrightRoll is a terrific, strategic and financially compelling fit for our video advertising business," said Yahoo CEO Marissa Mayer.

BrightRoll, based out of San Francisco, offers ways for customers to buy and sell video ads on websites, mobile devices and connected TVs, CNET reported.

The BrightRoll deal gives Yahoo a chance to improve its business as it tries to increase mobile advertising revenue and stay ahead of Facebook, Google and other competitors. Mayer told analysts last month that mobile ads made up 62 percent of all revenue in the third quarter of this year, which is an increase from the previous year, when it made up 41 percent.

Mayer said Tuesday that Yahoo always focuses on video advertising with its acquisitions, using BrightRoll as an example, Fortune reported.

"This acquisition will accelerate the growth of both companies- we can help BrightRoll scale to even more advertisers globally and they can bring their tremendous platform offering to Yahoo's advertisers," she added.

Yahoo is expected to finalize its deal with BrightRoll in the first quarter of 2015.