Verizon acquires AOL for $4.4 billion

Verizon, the US telecom major has acquired digital media company AOL for $4.4 billion. The acquisition will not only allow greater access to AOL’s global content brands which includes The Huffington Post, TechCrunch, Engadget, Makers and AOL.com but also the company’s advertising business.

According to reports, since Tim Armstrong took charge of the company in 2009, the digital media company’s fortunes turned around especially the advertising arm, AOL Platforms. However, the primary revenue streams for the company remains its subscription business as well as it global content portfolio.

Reports have suggested that acquisition will allow Verizon to use AoL’s advertising services, which is considered to be one-stop shop for many—from analytics to tools for customers to other services.

This is very much in sync with Verizon’s plans to launch digital video services, which in turn can now use AoL’s advertising expertise.

It should be noted that the deal is also expected to further drive Verizon’s LTE wireless video and OTT (over-the-top video) strategy. “Verizon’s vision is to provide customers with a premium digital experience based on a global multiscreen network platform. This acquisition supports our strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium customer experience,” said Lowell McAdam, Verizon chairman and CEO.

Sharing a similar sentiment, Tim Armstrong AOL chairman and CEO, stated, ““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.”

Armstrong will continue as the chairman of the company once the acquisition is completed by the end of summer. At present, the deal is subject to regulatory approvals.