Verizon/AOL Acquisition: All About OTT, Digital Content, Advertising

In a somewhat surprising move, Verizon, looking to beef up its mobile video and advertising, announced an acquisition of AOL for $4.4 billion in cash. Verizon’s deal “further drives its LTE wireless video and OTT strategy. The agreement will also support and connect to Verizon’s IoT platforms, creating a growth platform from wireless to IoT for consumers and businesses,” the telco said in a release Tues.

As part of the deal, AOL will become a wholly owned subsidiary of Verizon. Tim Armstrong, AOL chairman and CEO will continue to lead AOL operations after closing, which is expected this summer. “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,” chairman and CEO Lowell McAdam said in a statement. Calling AOL “a digital trailblazer,” he said AOL platforms fit into Verizon’s plan to invest in emerging technology including Verizon Digital Media Services and OTT. In addition, AOL’s ad model “aligns with this approach, and the advertising platform provides a key tool for us to develop future revenue streams,” McAdam said. Verizon has been developing its own OTT platform using assets it acquired from Intel. The OTT platform is also expected to power next-generation FiOS TV products.

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, original video content and its programmatic advertising platforms. See CableFAX Daily for more details on the deal.