Verizon has just announced that they are working to purchase AOL. The price for this iconic media group is $4.4 Billion, which translates to about $50 per share. AOL has bounced around a fair amount in their history. They started off as one of the premier internet service providers in the 1990’s before dial up started to fall out of favor. They weren’t able to effectively translate out of that type of ISP, but they did become a very successful media company. They were purchased by Time Warner in 2000, but then in 2009 they broke off as their own company again.
AOL today owns major web properties including the Huffington Post, TechCrunch, Engadget and more, which is why they are so attractive to Verizon.
According to a statement from Verizon, “Verizon’s acquisition further drives its LTE wireless video and OTT (over-the-top video) strategy. 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 will also benefit from AOL’s advertising model, which has been performing quite well in recent years.
While the deal still requires regulatory approval, it is expected to go through without any significant challenges. If that is the case, it will likely be completed later this summer.
Verizon hasn’t commented on whether or not any changes will take place in the company immediately or long term. The current CEO of AOL, Tim Armstrong, will remain in place to lead the company, which will become a wholly-owned subsidiary of Verizon.
Given the major sites that AOL currently owns, this type of acquisition should always be of interest to marketers. Even if it not yet clear exactly how the changes will impact the industry.