You've Got Mail: Verizon Scoops Up AOL For $4.4 Billion
I guess you could say that nothing surprises us anymore. After all, we learned this weekend that AOL’s dial-up business still has over 2 million customers who pay on average just under $21 per month for service. Unbelievable in this day of broadband Internet, right? Regardless of how strange that seems to those of us that salivate over the prospects of gigabit Internet, these folks clinging to 56k modems are adding millions to AOL’s bottom line.
But we also have to recall that AOL has a massive digital advertising platform with a heavy focus on the mobile sector. And we also can’t forget AOL owns a wealth of popular web destinations including Engadget, TechCrunch, and The Huffington Post.
With this in mind, it shouldn’t be too surprising that Verizon has offered AOL a marriage proposal. Verizon is acquiring AOL for an estimated $50 per share, which brings the total value of the transaction to $4.4 billion. Verizon is banking on the deal to boost its rollout of LTE wireless video and over-the-top (OTT) video. AOL will also strengthen Verizon’s position in the Internet of Things (IoT) market — the latest buzzword that has taken the tech industry by storm.
“Verizon’s vision is to provide customers with a premium digital experience based on a global multiscreen network platform,” said Verizon CEO Lowell McAdam. “This acquisition supports our strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium customer experience.”
“Verizon is a leader in mobile and OTT connected platforms, and the combination of Verizon and AOL creates a unique and scaled mobile and OTT media platform for creators, consumers and advertisers,” added AOL CEO Tim Armstrong. “The visions of Verizon and AOL are shared; the companies have existing successful partnerships, and we are excited to work with the team at Verizon to create the next generation of media through mobile and video.”
AOL will become a wholly-owned subsidiary of Verizon once the transaction is completed this summer and Armstrong will remain onboard to head up AOL’s operations.