US Network Verizon Buys AOL for Mobile Video Platform

verizon aol dealUS mobile network operator Verizon has bought AOL in a $4.4bn (£2.8bn) acquisition centred around gaining access to the firms mobile video platform and wide variety of publisher content including the Huffington Post news website.

The deal includes the firms dial-up subscription business, websites including Techcrunch, Engadget and Makers, and around $300m of debt that the company currently holds. The acquisition highlights the diversification that many mobile carriers are attempting as markets mature and data overtakes calls as the primary concern of most users.

Verizon has said the deal is part of its strategy to grow its LTE wireless and OTT video, and that AOLs mobile video platform enables them to target the $600bn global advertising industry more effectively.

AOL currently holds a 0.74 per cent market share of the worldwide digital ad market, compared to Googles 31.4 per cent share, and Facebooks 7.9 per cent. In the US, its market share is slightly larger, at 2.1 per cent.

“Verizons vision is provide customers with a premium digital experience based on a global multi-screen network platform,” said Lowell McAdam, chairman and CEO of Verizon. “This acquisition supports our strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium customer experience.”

Tim Armstrong, chairman and CEO of AOL, will continue to head operations at AOL, which will become a fully-owned subsidiary of Verizon under the deal, which is still to be approved by the usual regulatory bodies.

“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,” said 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.”