Verizon Communications announced an agreement to buy AOL, the digital content and advertising platform provider, in a deal worth around $4.4 billion, which the operator said would “further drive” its LTE and OTT video strategy, as well as bolster the operator’s mobile advertising platform.
“Verizon’s vision is to provide customers with a premium digital experience based on a global multiscreen network platform,” said Lowell McAdam, Verizon CEO. “This acquisition supports our strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium customer experience.”
AOL’s assets include its subscription business and portfolio of global content brands, including The Huffington Post, TechCrunch, Engadget, MAKERS and AOL.com, as well as its programmatic advertising platforms.
Indeed, TechCrunch flagged an internal memo by Tim Armstrong, AOL CEO. He spoke warmly about the merits of being acquired by Verizon.
“The deal means we will be a division of Verizon and we will oversee AOL’s current assets plus additional assets from Verizon that are targeted at the mobile and video media space,” said Armstrong. “The deal will not change our strategy – it will expand it greatly. The deal will give our content businesses more distribution and it will give our advertisers more distribution and mobile-first features. The deal will add scale and it will add a mobile lens to everything we do inside of our content, video, and ads strategy.”
McAdam was equally effusive. He said that Verizon had already been “strategically investing in emerging technology” which taps into the “market shift to digital content and advertising”.
“AOL’s advertising model aligns with this approach, and the advertising platform provides a key tool for us to develop future revenue streams,” he said.
The transaction will take the form of a tender offer followed by a merger, said Verizon, with AOL becoming a wholly owned subsidiary of Verizon upon completion.
The transaction is subject to regulatory approvals, but Verizon expects the deal to close this summer.