Verizon to buy AOL for $4.4 billion, boosting mobile media and advertising

Verizon to buy AOL for $4.4 billion, boosting mobile media and advertising
This just in! Verizon has confirmed plans to purchase AOL for the sum of $4.4 billion, in a move that AOL CEO Tim Armstrong believes will pave the way for a concerted, collaborative push by both firms into the world of mobile and video content.

The $4.4 billion cost equates to around $50 per share, and while AOL may be seen as a fallen giant that enjoyed its heyday during the dial-up Internet era, it remains a big cheese in the world of online content. In joining forces with Verizon, Armstrong's memo to employees outlines the collective intention to create "the best media technology company in the world." 

Since this is hot off the press, the finer details are still emerging, but from what we can gather, AOL will operate as a faction within the Verizon business. Verizon's broad content networks will be central to enhancing AOL's online brands, which include the likes of Engadget, TechCrunch and The Huffington Post.

Verizon sees the acquisition as a key development in its LTE wireless video efforts. With AOL also offering Emmy-nominated original video content, Verizon customers will likely be the first to reap the benefits of this new marriage in terms of content. But aside from the mobile and video side of the deal, these two giants are looking to revolutionize the world of mobile advertising. 

Despite the ubiquitous nature of mobile devices, mobile advertising is estimated to account for one-twelfth of the $600 billion global advertising industry. In building a "scaled, mobile-first platform offering" that can better target consumers, Verizon and AOL could improve upon the current state of play, although from a consumer perspective, this does seemingly translate to more ads. 

Given what Verizon offers in terms of networking, allied to the products and services that AOL already runs, this seems a mutually beneficial agreement for both parties. Whether these firms will evolve into the advertising and media superpower that Armstrong promises remains to be seen, but with the AOL chief suggesting the partnership will spawn the "next generation of media through mobile and video," the ambition is definitely there. 

Once the usual regulations have been signed off, the deal should be officially complete by the summer of this year.

source: Verizon

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22 Comments

1. QWIKSTRIKE

Posts: 1459; Member since: Mar 09, 2010

Smart move Big red wants to be Google.....AT&T should buy Yahoo....lol Now Google should flat out but Sprint!

3. johnbftl

Posts: 283; Member since: Jun 09, 2012

Google would end up in the same shoes as Sprint when they bought Nextel. The reason Sprint has struggled so much is because they have so much spectrum that cannot be used because they have to convert it. Sprint actually owns more spectrum than any other carrier. The problem is they have to convert iDEN, Wi-Max, and CDMA into LTE. They have struggle financially because of it. In the process of converting customers have become frustrated because of network issues. In the short term Google would lose a lot of money, and it may not pay off.

5. o0Exia0o

Posts: 903; Member since: Feb 01, 2013

Sprint's acquisition of Nextel was a disaster! At one time Sprint was among the best when it came to quality of service, but after the Nextel purchase things steadily went down hill. How they have managed to keep the doors open and the lights on is just about beyond belief...

13. QWIKSTRIKE

Posts: 1459; Member since: Mar 09, 2010

tHE PROBLEM IS THAT THEY DON'T HAVE THE MONEY TO BUILD THE SPECTRUM OUT AS DENSE AS VERIZON OR AT&T.You both are so mis informed ...Sprints big problem is that they failed to build out the network when they had the money. Their stock was over 60.00 a share and instead of investing in R&D and expanding the Network they took big bonus'es and paid the shareholders. The only problem Sprint has now is expanding the network. Wake up there is no such thing as too much spectrum....the problem is having the money to implement coverage every where as densely as Verizon.

18. johnbftl

Posts: 283; Member since: Jun 09, 2012

Dude, I worked for Sprint as a Indirect Account Executive when they acquired Nextel. Don't tell me I'm misinformed. Sprint overpaid for Nextel, and soon were bleeding money. They laid all of us off 8 months after the acquisition because the couldn't afford to keep the program going. Couple that in with trying to find a way to migrate iDEN customers to CDMA, and launch Wi-MAX, it was a mess. Sprint was the second largest carrier after they picked up Nextel, before SBC and AT&T merged, turning Cingular back to AT&T Mobility. The reason their stock went from $60 a share all the way down to at it's lowest like $2 and change is because they overpaid for an analog network. It seemed like a logical idea because Nextel owned the business market back then, but as unlimited options became more affordable the need for direct connect became non-existent.

20. QWIKSTRIKE

Posts: 1459; Member since: Mar 09, 2010

Dude because you worked for Sprint does not elevate you to genius status about the internals of running the organization. Sprint may have, or may not have over payed for Nextel as you put it, and with Wimax failing to become industry standard, Light Squared collapsing, failing to invest in infrastructure i.e expanding the net work, and buying 15 billion worth of iPhone sales on loan is what's killing Sprint, and is why Sprint fell. No company has too much spectrum, and if they did the would not be scrambling to buy more. The only reason Sprint would sell spectrum is the desperate need to raise cash. In spite of those issues Sprint was still doing fine until 4G launched in the US in 2010. They had, and still have better coverage than Tmobiile, and the best, and most spectrum of all carriers with that 2.4g spectrum, and their only failing is that they lagg in 4G coverage. With the spectrum, and the tearing down of the old Network, and building the current Network from the ground up will catapult them to elite status for sure. They just need more money to expand that spectrum every where. The reason why they went from 57 a share to 2.00 a share is because they lost customers during the time the stock market crashed Genius. You are misinformed and your uneducated analysis spews misinformation. This misinformation can not be addressed in this thread because it's to deep for me to spoon feed all of the particulars. Stay at the carriers that suit you and watch Sprint blaze to the top, and rub some vaseline on that butt sore of yours!

21. johnbftl

Posts: 283; Member since: Jun 09, 2012

You are a special kind of stupid. I wasn't just some schmuck sales associate for Sprint. I handled all national retail chains that sold Sprint in the LAX market. My entire staff was brought into our office by our regional director and were told verbatim, “we lost a lot is money in the acquisition of Nextel. We cannot keep any of you on." I never said anything about them having too much spectrum. I said they owned more than any other provider. Sprint overpaid to carry Apple long after they were bleeding money for over a dozen straight quarters. Sprint wasn't doing fine in 2010. They had already been having consecutive quarters in the red for a few years. If you really think I'm putting T-Mobile on a pedestal over Sprint, you haven't ever read anything I've ever posted. T-Mobile is a joke with a CEO even stupider that Dan Hesse. Sprint will never catapult themselves into elite status. Not again. They were once the second best carrier, very close behind Verizon, but they pissed away all their money purchasing an analog network with a fading business market. Seeing as that happened in 2005 and they barely went dark in 2013, I would say that was a catastrophic failure. As poorly run as T-Mobile is, they've done a faster job at tearing down Metro's CDMA network. I've been working in the industry for 13 years. I'm guessing you think you're so informed and knowledgeable because you come on here and read poorly written articles by these writers that are journalism school dropouts. Work in the industry as long as I have, then come back and have a grown up conversion with me kid.

22. QWIKSTRIKE

Posts: 1459; Member since: Mar 09, 2010

The reason Sprint has struggled so much is because they have so much spectrum that cannot be used because they have to convert it You said that in your 1st post, and no I don't come to this site to read and repost. But I do read "wannabe" know it all post from jerks like you that think you are so much smarter than you really are! For me to have a grown up conversation with you I'd have to grow down to your level you snot nosed know it all. As for Sprint never rising I can't wait to see your face when this does happen. You just have your panties all bunched up because you lost your job. I bet it was because you were as smart as you are here posting about how great you are when you ar not.

2. o0Exia0o

Posts: 903; Member since: Feb 01, 2013

YAY!!! Another useless bloat app to be loaded onto my phone to take up memory that I'll never use! SAID NO ONE EVER!!!!

4. JunitoNH

Posts: 1946; Member since: Feb 15, 2012

You took the words out my mouth, prepare for the AOL app. +1

7. o0Exia0o

Posts: 903; Member since: Feb 01, 2013

Why thank you...Before long you'll be able to purchase a 32GB device with a whole 5GB of useable storage...Just leave it to VZW to "bundle" in all of these useable apps that no one likes with no way to remove them.

6. dirtydirty00

Posts: 428; Member since: Jan 21, 2011

AOL is still worth 4.4 billion? Im suprised its not belly up...

9. michaelny2001

Posts: 328; Member since: Aug 01, 2012

my thoughts exactly. I would say it'sor ein the hundreds of millions, but not billions. When was the last time anybody heard of AOL? I mean with behemoths like TWC, Comcast and Fios, who's using AOL? I could be wrong, i don't know, but that price seems high.

16. Jason78

Posts: 281; Member since: Apr 10, 2013

AOL is a lot more than internet service. They brought in $2.3 Billion in revenue in 2013.

8. wateryspit

Posts: 14; Member since: Jan 25, 2011

new charges to your bill coming soon

10. LordCaedus

Posts: 85; Member since: Nov 01, 2013

Just so long as my phone doesn't say 'You've Got Mail' when I get a message.

11. corporateJP

Posts: 2458; Member since: Nov 28, 2009

The next step towards Verizon's internet domination plan and the ability for them to only allow you to view the content they want you to see. The dark side of the confusing realm of "net neutrality"...

12. _PHug_

Posts: 482; Member since: Oct 11, 2011

AOL is still around?!?

14. downphoenix

Posts: 3165; Member since: Jun 19, 2010

RIP Huffington Post, a great liberal media source. Verizon will kill them off.

15. StanleyG88

Posts: 240; Member since: Mar 15, 2012

I didn't know that AOL was still in existence, who knew?

17. xq10xa

Posts: 810; Member since: Dec 07, 2010

AOwho?

19. javy108

Posts: 1004; Member since: Jul 27, 2014

does anyone has AOL account at all?

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