Verizon is planning to buy AOL for $US4.4 billion.
AOL CEO Tim Armstrong had long been rumoured to be trying to sell his company, but the news still comes as a surprise.
The deal is a bit confounding since AOL is an advertising technology company with a few strong media properties like Huffington Post and TechCrunch. Verizon is a wireless carrier, with a small business in fibre TV.
So why did Verizon want AOL? Here, per AOL, are 5 reasons this deal makes sense. The last point is the most important:
1. The combination of Verizon and AOL brings us to the scale of Facebook and Google: Verizon touches 70% of Internet traffic across 1.5 billion PCs, TVs and mobile devices.
2. The combination of Verizon and AOL creates a powerful force in mobile, video, social, and programmatic platforms.
3. Verizon leads in mobile & mobile video, and AOL leads in video & programmatic advertising. The combination creates the first & most powerful media technology company on the planet.
4. The bundling of Verizon and AOL creates a powerful platform for the unbundling of media.
5. AOL shareholders have more than doubled their investment value (~150%) during AOL’s turnaround, and now Verizon and AOL will double the size of the mobile video/TV ad market.