This morning when we woke up, we heard that Verizon was indeed acquiring AOL. And Verizon has now made it official. The bid is a $4.4 billion bid, and basically gives Verizon a decent content farm. AOL owns a few news sites that you may have heard of before, including TechCrunch, Engadget and The Huffington Post. Following the deal, AOL will be operating as a wholly-owned subsidiary of Verizon. The current Chairman and CEO of AOL, Tim Armstrong will continue to lead AOL operations once the deal has been closed.
“Verizon is a leader in mobile and OTT connected platforms, and the combination of Verizon and AOL creates a unique and scaled mobile and OTT media platform for creators, consumers and advertisers. The visions of Verizon and AOL are shared; 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.” – Tim Armstrong.
So why did Verizon buy AOL? Well there are a few theories, but the most likely one comes from their upcoming video streaming service. Verizon has already inked deals with content providers, including the NFL for this new service. And the company is planning to offer paid and free tiers with advertising. Which is where AOL’s advertising platform comes in handy. They have over 30,000 partners right now, so that’s a pretty big package for Verizon to be picking up. As far as the content side of AOL, we’re not sure what’s going to happen there. I’m sure Verizon will keep them around, however. What will be interesting is to see how Verizon integrates TechCrunch, Engadget, The Huffington Post and others into their mobile video streaming service, seeing as all of those news sites do their own video. It could really help expand their reach, actually.
Remember, the deal still needs to be approved by the powers that be. So there’s a possibility that this could not get approved and AOL remains where it was yesterday. However, we don’t see any real concrete reasons as to why Verizon wouldn’t be able to finish the transaction of buying AOL. We’ll see in a few months though.