Verizon bids US$4.4 billion for AOL

The operator wants more content and an advertising platform as it looks for new ways to make money

Verizon Communications has agreed to buy AOL for about US$4.4 billion, as it looks to build more extensive digital and video platforms to drive future growth.

Network operators have to find new ways to make money as their traditional revenue streams are under pressure from a new generation of companies such as Skype, Facebook and WhatsApp.

Verizon's acquisition plan further drives its LTE wireless video and OTT (over-the-top) video strategy, the operator said, adding that its plan is to deliver services to customers over a global multiscreen network platform;

AOL's key assets include its subscription business: Media brands such as The Huffington Post, TechCrunch, Engadget, Makers and AOL.com, as well as original video content, according to Verizon. The company is also after AOL's programmatic advertising platforms, and looks to combine that with its own assets to build a mobile-first advertising platform.

The transaction will take the form of a tender offer followed by a merger, with AOL becoming a wholly owned subsidiary of Verizon upon completion. The transaction is subject to the usual regulatory approvals, but the companies expect to close the deal this summer.

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Tags business issuesAOLMergers and acquisitionsVerizon Communications

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Mikael Ricknäs

IDG News Service
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