Verizon is buying AOL, “the dial-up Web site from the ’90s that gave many people their first email address and chat-room screen name” reported WIRED. Verizon wants AOL, WIRED continued, “because of its successful content creation and video advertising. With this deal, Verizon will also acquire The Huffington Post, which was purchased by AOL in 2011, and TechCrunch, which AOL purchased in 2010. Recently, AOL has seen revenue growth out of its video advertising business, which Verizon very much wants to get in on.”
According to Reuters, the $4.4 billion dollar deal turns the biggest U.S. wireless carrier into a leading provider of content and video for the web and mobile phones.
AOL Chief Executive Officer Tim Armstrong, who is staying in his role, “has been trying to build up AOL’s expertise in mobile advertising technology, sees mobile representing 80 percent of media consumption in coming years.”
The Reuters report stated that “Verizon has over 100 million mobile consumers, content deals with the likes of the National Football League and “a meaningful strategy” in mobile video, Armstrong said.
“For Wall Street, the deal is about the technology. “The primary attraction of AOL was the technology it has developed for selling ads and delivering online and mobile video,” Wells Fargo Securities analyst Jennifer Fritzsche wrote in a note.”
The Washington Post said the purchase is “part of a race to make money on mobile videos” which, it said, “consumers increasingly love and advertisers covet.”