Verizon gains video, advertising assets in $4.4 billion takeover of AOL
Verizon on Tuesday announced a deal to buy AOL at a cost of $4.4 billion, or $50 per share, in what the company said is a bid to advance its "wireless video and OTT (over-the-top video) strategy."
AOL CEO Tim Armstrong will continue to run the business if and when the acquisition is completed. Subject to approval, Verizon says the deal will be completed later this summer.
In a press release, Verizon CEO Lowell McAdam stated that his company has been investing in technologies that tap into the "market shift to digital content and advertising." Specifically the company is most interested in AOL's advertising business, which has grown quickly and lets publishers automate ad sales.
AOL is also known as the parent company of a number of major news websites however, such as Engadget, the Huffington Post, and TechCrunch. Rumors heard by Re/code suggest that Verizon may spin out some or all of AOL's content businesses with a third partner.
Verizon itself briefly attempted to enter the tech news world last October with a website called SugarString. By December the site was already shut down, potentially in part because of controversies about it banning authors from covering topics Verizon deemed unacceptable, such as net neutrality or domestic spying by the National Security Agency.
Verizon was infamously the subject of the first leak by former NSA contractor Edward Snowden, and was shown to have handed all its customers' phone records to the NSA. The company has also been one of the leading parties against net neutrality, which mandates that all Internet traffic be treated equally.
AOL CEO Tim Armstrong will continue to run the business if and when the acquisition is completed. Subject to approval, Verizon says the deal will be completed later this summer.
In a press release, Verizon CEO Lowell McAdam stated that his company has been investing in technologies that tap into the "market shift to digital content and advertising." Specifically the company is most interested in AOL's advertising business, which has grown quickly and lets publishers automate ad sales.
AOL is also known as the parent company of a number of major news websites however, such as Engadget, the Huffington Post, and TechCrunch. Rumors heard by Re/code suggest that Verizon may spin out some or all of AOL's content businesses with a third partner.
Verizon itself briefly attempted to enter the tech news world last October with a website called SugarString. By December the site was already shut down, potentially in part because of controversies about it banning authors from covering topics Verizon deemed unacceptable, such as net neutrality or domestic spying by the National Security Agency.
Verizon was infamously the subject of the first leak by former NSA contractor Edward Snowden, and was shown to have handed all its customers' phone records to the NSA. The company has also been one of the leading parties against net neutrality, which mandates that all Internet traffic be treated equally.
Comments
So, what is Verizons' angle on advertising? Their subscribers going to be sucked down the black hole?
Maybe they will profile for the government????
Let's look at it a different way. What patents does AOL hold? Article says Verizon might spin off some of AOL but will they keep patents to use against others? I thought AOL was dead a long time ago but it just won't go away.
1. AOL still exists
2. They're worth more than a dollar
Regardless of some of the parts that consumers may actually use (Huffington Post, etc.), AOL's reputation is a joke and no matter how it changes (even if it simply becomes a video delivery and advertising platform), it's still going to have the reputation of a once-great service that is now used by great-grandmothers who don't want to pay for high-speed internet or who live in the sticks where it's not available.
That's going to really hurt Verizon's reputation, IMO. How can it promote itself as a company that incorporates the very latest technology when it owns AOL?
(Personally, I still actually use AOL. Whenever a website insists upon an email address and I don't want to give them one, I give them my AOL address. Then I go in there about once a month just to check if there's any "real" email and dump everything else out.)
Hey still better than The Verge?
Glad I saved every AOL floppy and CD that I ever got.
What do I get with this takeover?
When I read about the Verizon takeover of AOL on another Web site, I remembered Apple had recently ended its iTunes login partnership with AOL.
It was one of those, "Hmmm...." moments.
I wondered if Apple knew this takeover was coming and decided to end the partnership to prevent Verizon from gaining access to iTunes customer data.
Here is the AI link about the Apple/AOL partnership ending...
http://forums.appleinsider.com/t/184911/apple-aol-ending-itunes-login-partnership-users-must-migrate-to-apple-id-by-march-31
Why? AOL already killed two of the best sites, Tuaw and Joystiq. What's left? I'd be curious what is worth 4.4 billion.
Schlubs paying $23 a month for dialup?
I sure do miss those AOL chatrooms. a/s/l?
Post of the day.
Their SEC filings are here:
http://ir.aol.com/phoenix.zhtml?c=147895&p=irol-10k10q
Last year, they made $1.92b from advertising, $606m from subscribers to anti-virus software, premium video services etc. They own Engadget, TechCrunch, Huffington Post, Moviefone, Makers, StyleMePretty, MapQuest. People using any of those sites keep AOL alive.
$995m in advertising revenue from their own sites. $856m from 3rd party sites, $407m is from Google search. They sell ad services to 3rd parties, I guess to save them acquiring advertisers themselves and then share the revenue.
Their subscriber numbers are falling, they can't live forever. They have 2.2m left.
The revenues are pretty high considering they only have 4350 employees. Their net income has been quite low the past couple of years but was over $1b in 2012.
Personnel costs are $611m, $54m facilities, $703m traffic acquisition, $165m network costs, $80m content.
Verizon's interest seems to have been in their TV services delivered over the internet. Apparently some of the following content has managed 10-15 million views:
http://on.aol.com/originals
That's a lot compared to TV shows but it's quite low for online content where music videos get hundreds of millions of views. The network carriers want to be tying up as much original content as they can to sell the connection.
It has better spam filters than most, it's been the most reliable (for me, anyways) and they've had push notifications for iOS for years, plus it plays nice with IMAP mail clients (Mac & iOS Mail)... and it is NOT GOOGLE.
Well, AOL, it's been a great run. Since you've been burned at the stake by Verizon, I might have to finally start looking elsewhere after nearly 30 years. Verizon is the 2nd evil behind Google.
You could always set up your own mail services on a Mac Mini and be done with it.
Post of the day.
That's not a very exciting one. Where's HAMETA anyway?