▼ Scroll to Site ▼

Verizon Will Acquire AOL for $4.4B, Mobile Video a Central Reason

Article Featured Image

A new paragraph in AOL's Wikipedia entry began today, as Verizon announced that it will buy AOL for $4.4 billion in an all-cash transaction. Verizon will pay $50 per share, which The New York Times reported is a 17 percent premium over Monday's closing share price. AOL will become a wholly owned subsidiary of Verizon once the acquisition is completed.

While the two companies might not seem a natural fit, Verizon is looking to AOL to help further its LTE wireless video and OTT (over-the-top) platforms.

Advertising is central to the deal, as Verizon and AOL will combine to create a scaled, mobile-first platform for ads, Verizon reports. AOL brands include The Huffington Post, TechCrunch, Engadget, Makers, and AOL.com. As StreamingMedia.com readers know, AOL has been one of the leaders in creating original premium online video.

Mobile video is the central reason why this union is happening, says IBISWorld industry research analyst Sarah Kahn.

"If approved by regulators, the Verizon-AOL deal is expected to trigger a race among other industry players to invest their capital and research on mobile video consumption and advertising," Kahn said. "In the short-term, Verizon is expected to maintain its position as an industry leader in wireless telecommunication, with AT&T close on its heels, especially with the latter’s attempt to acquire satellite TV provider DirecTV. The advertising and video race to consumers’ pockets has begun"

Following completion, AOL chairman and chief executive Tim Armstrong will remain in his position as the head of AOL.

“The visions of Verizon and AOL are shared,” Armstrong said. “The companies have existing successful partnerships, and we are excited to work with the team at Verizon to create the next generation of media through mobile and video.” 

Streaming Covers
Free
for qualified subscribers
Subscribe Now Current Issue Past Issues
Related Articles

Verizon Shows That it Can Create OTT Experiences in 72 Hours

In the "72-Hour Challenge," Verizon and Digiflare created mobile and set-top apps for media organizations at a breakneck pace.

Online Video Advertising Taking Heavily From TV Ad Budgets: AOL

In its yearly look at the state of online video advertising, AOL finds that online video budgets are rising at the expense of TV ad budgets.

Verizon/AOL to Launch Go90 This Week, Publicis Signs an Exclusive

The streaming service will launch on iOS and Android on Thursday, providing a millennial-oriented, mobile-first take on OTT video.

AOL Shows TV in Transition in Programmatic Advertising Report

With fewer people watching broadcast television, broadcasters have had to increase ad loads to generate revenue. But then ad impact is diluted.

Verizon Taps Scripps Networks for Mobile Video TV Content

Over 45 lifestyle series will be available for mobile viewing by Verizon customers by the end of this year.

Viewers Increasingly Turn to Mobile Devices for Long-Form Video

Over half frequently or occasionally watch mobile video while watching a television at the same time, says the IAB.

AOL Announces NBCU Distribution Deal and a Slate of New Shows

Under the agreement, AOL will stream clips from multiple NBCU networks on its platforms and the two will co-develop upcoming programming.

Morgan Spurlock Gets Connected on AOL

Today, AOL debuts its biggest online video experiment yet: Connected, a reality show in which real people document their real lives. We sat down with producer Morgan Spurlock for this exclusive interview.

Are Viewers Paying Attention? AOL Creates a Distraction Metric

Online is the better buy, AOL tells video advertisers, because viewers are more likely to pay attention—and it has the numbers to back that up.