Verizon denies interest in AOL acquisition

Verizon Wireless, however, may partner with AOL for its digital ad services

Verizon Communications' CEO said Tuesday that the company is not interested in buying AOL, despite a press report indicating that the two companies were in acquisition talks.

"To say that we're having significant acquisition discussions is really not accurate," said CEO Lowell McAdam, at the Citi Global Internet, Media and Telecommunications conference in Las Vegas.

On Monday, the Bloomberg news service, citing anonymous sources, reported that Verizon was in early informal talks with AOL to acquire the company.

The two companies, however, may yet be discussing a partnership that would incorporate AOL's digital advertising services into the mobile video service offered by Verizon Wireless.

"I think AOL along with lots of other media companies are potential for us to do partnering with on a commercial basis," McAdam told investors.

Bloomberg also indicated that partnership talks may have taken place.

AOL's digital advertising services could be a good fit for Verizon Wireless, a subsidiary of Verizon Communications that provides cell phone service to over 106 million customers.

While AOL came to prominence as one of the first commercial providers of consumer Internet access, the company has shifted its strategy in the past decade to focus on becoming an online media company, acquiring highly trafficked Web sites such as Huffington Post and TechCrunch. It has also built up considerable expertise in targeted online ad delivery. The company draws about 250 million unique visitors to its sites every month.

The market for mobile advertising is growing rapidly. This year, mobile advertising revenue will increase by more than 5 percent to $189 billion, according research firm eMarketer.

Verizon Wireless may also feel the competitive pressure to acquire more customers. Last year, chief rival AT&T purchased DirecTV for $50 billion. DirecTV serves about 50 million customers with its satellite-based television service.

In addition to advertising revenue, AOL also maintains a legacy dial-up Internet service, which is still used by over 2 million subscribers.

Both Verizon and AOL declined to comment for the story.

Joab Jackson covers enterprise software and general technology breaking news for The IDG News Service. Follow Joab on Twitter at @Joab_Jackson. Joab's e-mail address is Joab_Jackson@idg.com

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