Remember AOL? You know, the dial-up Internet provider who used to send you all those free CDs? Well, the company has since transformed itself into something of a content and advertising giant—one Verizon plans to buy for a cool $4.4 billion. The telecommunications firm announced the acquisition today, and the press release suggests that both content and avertising are key components in the deal.
AOL is a leader in the digital content and advertising platforms space, and 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. 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 millennial-focused OTT, Emmy-nominated original video content; and its programmatic advertising platforms.
According to the Wall Street Journal, Verizon President of Operations John Stratton said at an investor conference today that "the principal interest was around the ad tech platform." Verizon is reportedly prepping a mobile-oriented video service that will include ad-supported content, and the acquisition seems to be related. That service will focus on shorter clips, the WSJ says, and it will supposedly let users tap into live events like sports and concerts.
On the content front, Engadget editor Dan Cooper said on Twitter that the site "will remain editorially independent from any Verizon interference." I don't see any news related to TechCrunch, but Recode reports that AOL has been trying to spin off Huffington Post in a separate deal worth over $1 billion. It's unclear what will happen to those negotiations in the wake of today's announcement.
Verizon's acqusition still needs to be approved by regulators, of course. If there are no objections, the deal should close this summer.
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