Verizon gains video, advertising assets in $4.4 billion takeover of AOL

Posted:
in General Discussion edited May 2015
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.
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Comments

  • Reply 1 of 22
    icoco3icoco3 Posts: 1,468member

    So, what is Verizons' angle on advertising?  Their subscribers going to be sucked down the black hole?

     

    Maybe they will profile for the government???? :no:

  • Reply 2 of 22
    MacProMacPro Posts: 19,382member
    AOL ... why does that ring a feint bell? Was that a morse code system?
  • Reply 3 of 22
    thewhitefalconthewhitefalcon Posts: 4,453member
    Well, it's not like Engadget can get any worse than it already has under their current editor.
  • Reply 4 of 22
    SpamSandwichSpamSandwich Posts: 33,408member
    They should buy Yahoo next.
  • Reply 5 of 22
    rob53rob53 Posts: 2,647member

    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.

  • Reply 6 of 22
    andyringandyring Posts: 43member
    Wow. Two huge things about this really surprise me:

    1. AOL still exists

    2. They're worth more than a dollar
  • Reply 7 of 22
    zoetmbzoetmb Posts: 2,586member

    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.)        

  • Reply 8 of 22
    rogifanrogifan Posts: 10,669member
    Well, it's not like Engadget can get any worse than it already has under their current editor.

    Hey still better than The Verge?
  • Reply 9 of 22
    applezillaapplezilla Posts: 941member

    Glad I saved every AOL floppy and CD that I ever got.

     

    What do I get with this takeover?

  • Reply 10 of 22
    leavingthebiggleavingthebigg Posts: 1,252member

    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

  • Reply 11 of 22
    emig647emig647 Posts: 2,435member

    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.

  • Reply 12 of 22
    thewhitefalconthewhitefalcon Posts: 4,453member
    emig647 wrote: »
    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?
  • Reply 13 of 22
    boltsfan17boltsfan17 Posts: 2,274member

    I sure do miss those AOL chatrooms. a/s/l?

  • Reply 14 of 22
    quinneyquinney Posts: 2,528member
    You've got fail.
  • Reply 15 of 22
    SpamSandwichSpamSandwich Posts: 33,408member
    quinney wrote: »
    You've got fail.

    Post of the day.
  • Reply 16 of 22
    MarvinMarvin Posts: 14,548moderator
    emig647 wrote: »
    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?

    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.
  • Reply 17 of 22
    dysamoriadysamoria Posts: 3,430member
    Yay, more corporate takeovers and mergers. We are still on schedule to have an entire three companies running the entire world by 2026.
  • Reply 18 of 22
    redgeminiparedgeminipa Posts: 541member
    Am I the only one who still uses AOL mail?

    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.
  • Reply 19 of 22
    mdriftmeyermdriftmeyer Posts: 7,502member
    Am I the only one who still uses AOL mail?

    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.
  • Reply 20 of 22
    hmmhmm Posts: 3,405member
    Quote:

    Originally Posted by SpamSandwich View Post





    Post of the day.



    That's not a very exciting one. Where's HAMETA anyway?

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