Globally known, telecom powerhouse Verizon purchased Aol. for $4.4 billion dollars adding up to $50/share in May of 2015. The once 1990s digital dial up company and brunt of quite a few internet jokes, Aol. does much more today than it did in the past.
The reasoning behind the merger
Verizon has been brewing up a plan for quite some time now in which it aims to dominate all channels of digital publication and advertisting. Tim Armstrong, CEO of Aol. talked about the future of the two companies. If there was one word to sum it all up it is: mobililty.
It is no surprise that we are in the midst of a digital age. Any subject imaginable is right at the disposal of our fingertips. You can access any topic from your smartphone, tablet, or computer. Over the years and with the progression of cellphones and smartphones, people have been accessing the internet more on their mobile device than on any other platform.
Future access of information
The future of nearly all advertising is going to be digital. That being said, Aol. generates over $600 million in digital advertisting alone. The internet provider owns news companies such as The Huffington Post, TechCrunch, and Engadget to name a few. Aol. has in a sense transformed itself over the past years into a a platform that has everything for marketers seeking to buy digital ads across the web, mobile devices, and television. With this deal, Verizon has high hopes for increase in sales of phones and internet offerings because of Aol.’s video and advertising technologies. Aol.’s video advertising reaches nearly 55% of the U.S. population. Apart from these technologies, Aol. offers tools for sellers and buyers as well as analytics. Verizon looks also to steal more market shares from other cellular and internet providers, AT&T and Sprint.
Verizon is planning on launching a video service catered only to mobile devices during this summer. The CFO of Verizon, Francis J. Shammo, said that this new service is going to offer a mixture of free, paid, and ad-supported content. The service isn’t going to offer half hour or hour programs but rather it will feature shorter clips. Content such as sports, concert, and on-demand viewing may also be available through multicast programming.
If the merger of the two companies proves to be beneficial, then Verizon will further tighten its grip on the mobile market, while at the same time revitalizing a company that opened the eyes of many Americans to the internet, but has been recently been forgotten.