The American mobile titan ‘Verizon’ has recently announced that it will be buying ‘AOL’ for 4.4 billion dollars. That’s a price of $50 per share, and the transaction is expected to be completed this summer. This is something ‘Verizon’ wanted from sometime, an instantly powerful ad network. AOL has a portfolio of well-known brands, including many web publications such as Engadget, TechCrunch and The Huffington Post, all of which will come under ‘Verizon’ ownership once the deal is complete. ‘Verizon’, like UK peers BT and ‘Vodafone’, is trying to become more of a one-stop shop for internet services and entertainment.
It is recently reported that ‘Verizon’ will be launching a mobile-focused video service later this year, and has already inked content deals with several content providers, including the NFL. The carrier will offer paid and ad-supported tiers, which is where AOL’s advertising clout is bound to come in handy. Having AOL’s digital content and advertising expertise is seen as a major asset in advancing Verizon’s strategy to monetize LTE wireless video and other over-the-top video services. For its part, ‘AOL’ will retain current CEO and chairman Tim Armstrong as its leader of operations after completion of the deal.
CEO Tim Armstrong said to all ‘AOL’ staff in the wake of this big announcement, “Today, we are announcing that the largest and most innovative wireless and cable company – and the one investing the most in high quality mobile content – is acquiring AOL with the strategy of building the biggest media platform in the world. The company is Verizon and the deal will game-change the size and scale of AOL’s opportunity. Just as AOL has propelled The Huffington Post, Adap.tv, TechCrunch, and other companies we have acquired, Verizon will propel AOL and comes to the table with over 100 million mobile consumers, content deals with the likes of the NFL, and a meaningful strategy in mobile video.”
“The decision to enter into an agreement with Verizon was made over a long and thoughtful time period and both companies see significant opportunity to service consumers and customers in a differentiated and exciting way. On a personal level, the decision to go forward with an agreement was predicated on giving our talent the best opportunity to build a multi-decade business that would be deeply growth oriented and aimed directly at the platform shift that video and mobile are offering the world – today and 20 years from now.”
The future of AOL’s video platform appears assured under its new ‘Verizon’ overlords – the announcement made it clear that “the visions of Verizon and AOL are shared” in this regard, adding that the two companies will now be working more closely “to create the next generation of media through mobile and video.” But it’s not yet clear what Verizon intends to do with some of its other web properties, including the likes of TechCrunch and Engadget.
