Verizon Communications Inc. has agreed to buy online pioneer AOL Inc. for about $4.4 billion.
Verizon’s acquisition further drives its LTE wireless video and OTT (over-the-top video) strategy, the company stated.
The transaction was puzzling to those who did not know that AOL was building up online advertising platforms.
The company is best known for its dial-up internet service in the 1990s and its ownership of online properties like the Huffington Post.
AOL also operated the local news website chain, Patch, which lost tens of millions of dollars and was later sold. Patch never operated in the Delaware market after first indicating it would set up a presence in Newark.
The agreement will also support and connect to Verizon’s IoT (Internet of Things) platforms, creating a growth platform from wireless to IoT for consumers and businesses, Verizon further stated.
The combination of Verizon and AOL creates a scaled, mobile-first platform offering directly targeted at what eMarketer estimates is a nearly $600 billion global advertising industry,” a Verizon release stated.
AOL’s key assets include its subscription business; its premium portfolio of global content brands, including The Huffington Post, TechCrunch, Engadget, MAKERS and AOL.com, as well as its original video content; and its programmatic advertising platforms.
Lowell McAdam, Verizon CEO, said “AOL has once again become a digital trailblazer, and we are excited at the prospect of charting a new course together in the digitally connected world. At Verizon, we’ve been strategically investing in emerging technology, including Verizon Digital Media Services and OTT, that taps into the market shift to digital content and advertising. AOL’s advertising model aligns with this approach, and the advertising platform provides a key tool for us to develop future revenue streams.”
Tim Armstrong, AOL chairman and CEO, will continue to lead AOL operations after closing.
The transaction is subject to customary regulatory approvals and closing conditions and is expected to close this summer.
