Apollo Global Management said Wednesday that it has completed its purchase of internet icon Yahoo -- formerly Verizon Media -- for about $5 billion, from Verizon Communications. As part of the deal, Verizon will retain a 10% ownership interest in the new company.

Verizon and Apollo first announced the deal in May, and the sale includes ad tech assets.

Verizon bought Yahoo in 2017 for about $4.5 billion and later combined it with another iconic internet brand AOL -- which it purchased in 2015 for $4.4 billion  -- into a new entity called Oath. Oath was renamed Verizon Media in 2018, shortly after the telco took a $4.5 billion write-down on the unit. 

“We look forward to partnering with Yahoo's talented employee base to build on the company's strong momentum and position the new Yahoo for long-term success as a standalone consumer internet and digital media leader,” Apollo partner Reed Rayman said in a press release. “We couldn’t be more excited about this next chapter for Yahoo as we look to invest in growth across the business, including accelerating its customer-first offerings and commerce capabilities, expanding its reach and enhancing the daily user experience.”

Verizon Media CEO Guru Gowrappan will continue as CEO of Yahoo under its new owners.  

“This is a new era for Yahoo,” Gowrappan said in a press release. “The close of the deal heralds an exciting time of renewed opportunity for us as a standalone entity. We anticipate that the coming months and years will bring fresh growth and innovation for Yahoo as a business and a brand, and we look forward to creating that future with our new partners.”

Verizon has laid off 7% of workers in its oft-reconfigured and rebranded digital media business, accounting for around 800 employees.

"These were difficult decisions, and we will ensure that our colleagues are treated with respect and fairness, and given the support they need," said Guru Gowrappan, Verizon Media's CEO, in a letter to employees. "I want to be clear that we will continue to scale, launch new products and innovate. We are an important part of Verizon.”

The move marks an unfortunate end of an expensive plan by Verizon to transition from a wireless and wireline focused telecom into a media giant that could compete with Google and Facebook for digital ad money.

Related: Verizon Clears Capital for 5G Investment by Laying Off 10,400 Workers

Along the way, Verizon purchased AOL for $4.6 billion, and Yahoo! for another $4.48 billion. In December, Verizon took a $4.6 billion write-down, acknowledging that its Oath Brands—the initiative wrought by the pricey acquisitions—had failed.

These tough moves don’t mark the end of the line for Verizon in the media business. The company is reportedly still high on components like Yahoo-branded news, sports, finance and entertainment portals, which remain vital content assets under new priorities that built around 5G mobile networks.

Verizon Digital Media Services is reportedly still a priority as well.

According to the Wall Street Journal, the Verizon Media Group had 12,845 employees when it purchased Yahoo! in 2017. It had 11,385 at the end of 2018.

Verizon’s retrenchment comes as AT&T begins to integrate Time Warner Media into its longterm wireless broadband distribution plan, and Comcast ingests U.K. satellite TV company Sky to also transition into a global media power. 

Veteran digital content and advertising executive Tim Armstrong will depart as head of Verizon’s Oath digital media business in the next few weeks, as the wireless giant continues to pivot away from the content business.

The news was first reported by The Wall Street Journal and later confirmed by Verizon.

Armstrong led AOL’s advertising and content business from 2009-2015, when AOL was acquired by Verizon for $4.4 billion. At Verizon, he attempted to build a digital advertising business comparable to Facebook and another of his previous employers, Google, spearheading Verizon’s $4.8 billion purchase of Yahoo in 2016. The unit housing Verizon’s digital advertising efforts sought to promote media brands like HuffPost, TechCrunch and Yahoo Sports to Verizon’s 116 million wireless subscribers. But only a fraction of those users, 10 million, have opted into “Verizon Selects,” the program that enables the company to know enough about users to deliver them targeted advertising.

The division’s struggles were highlighted over the spring, when Verizon finally gave up on mobile-first content platform go90, which struggled mightily despite ample promotion. Verizon took a $900 million hit to its balance sheet in the second quarter following that shuttering.

Further, Verizon has changed course on its perspective on the content business, prioritizing 5G connectivity infrastructure. Over the summer, Lowell McAdam announced his pending retirement, with former Ericsson CEO Han Vestberg—currently serving as CTO of Verizon—taking over as Verizon chief executive on August 1.

Over the summer, according to WSJ, Armstrong reportedly informed senior Oath leaders that he was handing day-to-day oversight of Oath to former Alibaba Group Holding Ltd. executive K. Guru Gowrappan, who joined Oath over the spring.

Also reported to be departing Oath are Vanessa Witteman, the division’s head of finance, and Natalie Ravitz, its communications chief. 

Oath, the Verizon unit that contains Yahoo and AOL, said it has applied greater focus on delivering addressable, targeted advertising to the Fios TV footprint.

That move follows a decision to shut down ONE TV, a programmatic TV offering that originated with AOL and tied in AOL’s 2013 acquisition of Adap.tv.

AOL Becomes ‘ONE’ With Programmatic Advertising

“The Fios household addressable offering represents what we believe to be the future of television,” Brett Hurwitz, business lead, advanced TV at Oath, said. “Today’s TV’s ecosystem is changing and the pace of that change is only going to accelerate.”

While digital programmatic advertising has added targeting and accountability, bringing that model will have a greater impact, he said.

RELATED: Oath Announces 10 New Video Series at NewFront

He said One TV was a “great product” for the clients that used it (they could essentially self-serve and buy against their targets online), but said it likewise made sense to shift more focus to Fios’s TV footprint of about 4.6 million homes as the future of TV moves from a model of one to many, to one-to-one.

The Fios TV addressable offering was launched in the fall of 2016 and initially ran in parallel with One TV (Oath has retained the intellectual property for One TV and could still use it for future endeavors). 

Hurwitz said the move also makes sense as advertisers use a portion of their linear TV budget to buy household addressable campaigns and use that data for their larger linear TV ad buying spend.

There’s a logical progression with household addressable approaches that allow marketers to use that same targeting data and measurement data for their OTT-connected campaigns and for the results of TV-based campaigns to complement and fuel their “lower funnel” digital activity.

Hurwitz also stressed that this isn’t about selling remnant inventory, but focused on premium properties offered on Fios TV that have been enabled for this level of sophisticated household addressability.

“The exciting thing for us is this change in television is really here,” he said. 

AOL is suffering an email outage Friday that is affecting customers across the country.

While some users report having no access, others have seen spotty access to AOL email during the morning hours Friday.

The number of complaints regarding AOL email on Down Detector have been spiking over the past couple of hours, with the concentration of complaints heaviest in regions such as southern California, up and down the East Coast, and across Florida.

AOL was acquired by Verizon in June 2015. Last year, Verizon announced it was shutting down its email business and providing those customers with an option with AOL that allowed its internet service customers retain their Verizon.net email addresses, or helping them transition to another email provider. 

On Friday, AOL acknowledged via its customer service handle on Twitter that it’s aware of the service issue and that engineers are working on a fix, but has not elaborated on the root cause.

Our top priority right now is getting you connected with AOL Mail. We appreciate your diligence and patience during this issue.

— AOL Customer Support (@AOLSupportHelp) March 2, 2018

We appreciate your patience while we are working on a fix. Our engineers are still investigating while AOL Mail is inaccessible for some of our users. We'll keep you posted once we have an update.

— AOL Customer Support (@AOLSupportHelp) March 2, 2018

We’re aware that service is slow/inaccessible for some of our users when trying to access AOL Mail. We are working to fix it as quickly as possible. We apologize for the inconvenience and thank you for your patience.

— AOL Customer Support (@AOLSupportHelp) March 2, 2018

Update: At 1:28 p.m. ET AOL tweeted that email services were back online: 

Update! AOL services are now working. We appreciate your patience.

— AOL Customer Support (@AOLSupportHelp) March 2, 2018

Oath, a unit of Verizon that runs Yahoo and AOL, has hired Vanessa Wittman ac CFO, charged with leading the unit through its “next phase of growth.”

RELATED: New Math: AOL + Verizon = Oath

Wittman, who will report to Oath CEO Tim Armstrong, has previously been CFO at Dropbox, Motorola and March & McLennan.

Former Oath CFO Holly Hess is moving to a newly created role at Verizon, where she will lead Verizon’s previously announced $10 billion cost savings initiative, and report to Verizon CFO Matt Ellis.

“Vanessa is an exceptional leader with singular experience, and she will be a great partner to help drive Oath's vision, strategy, and operations to reach our long term goals,” Armstrong said in a statement. “Vanessa joins Oath at an exciting point in our journey to build a differentiated company creating the future of mobile and the internet in combination with Verizon. I want to thank Holly Hess for being a founding force at Oath, as well as a driver behind the original Verizon and AOL deal. She made significant contributions to Oath and we look forward to continued collaboration with Holly in her new role at Verizon.”

Mobile and desktop video consumption are running virtually neck-and-neck, with 89% of consumers saying they watch video on smartphones and other mobile devices, compared to 70% on desktops, AOL found in a fresh study that tracked usage trends across seven global regions.

Additionally, 57% of consumers watch videos on a mobile phone every day, compared to 58% on desktops and laptops.

RELATED: Verizon Clinches AOL Acquisition 

Those findings indicate that the market is “very close to the tipping point where mobile will soon be the number one video screen,” AOL said.

But the shift toward mobile viewing is also tracking with consumption of short-form video, with 42% of those surveyed saying their watch videos that are 5 minutes or less in length each day.

That group tails off as the length of videos get longer – 31% of consumers said they watch video that is 20 minutes or longer -- AOL found in the study, which surveyed about 1,600 consumers in the U.S., Canada, the U.K., France, Japan, Australia and parts of Southeast Asia.

The study also focused on mobile viewing trends for virtual reality, 360-degree video and  live streaming. Among U.S. consumers, 74% said they watch live video content on their smartphones, while 28% had experienced VR, and almost half tried out 360-degree video. From a broader view, Southeast Asia was home to the highest concentration of consumers (76%) who said they watch live video on their smartphones.

Mobile video trends are also affecting advertising budgets, per a part of the study that included a sample size of buyers and sellers in the digital video ad sector. Some 47% of advertisers expected to boost mobile ad spend by at least 25% this year, and 57% of publishers anticipated to boost spending in that category by at least 25% in 2017.

In-app video, granular audience targeting, and the ability to buy mobile on a programmatic basis were viewed as the most popular mobile ad opportunities for 2017.

The line for bidders to purchase Yahoo’s assets is getting longer, with Verizon Communications and Google among those expected to put forth offers for the Internet pioneer.

According to reports, enthusiasm for the assets hasn’t waned, even as bankers have circulated a “sale book” that shows a troubled company with dwindling revenue and a need to pare its workforce.

According to a report by Re/Code, the sale book shows that Yahoo estimates 2016 revenue will decline by 15% and earnings will plunge more than 20%. The book also states, according to the website, that Yahoo expects to shed around 1,500 employees, ending the year with about 9,000 workers.

Yahoo has been under the microscope for years and put itself up for sale in February after the company shelved plans to spin out the Internet business. According to reports, Yahoo is looking for $10 billion for the assets, but Verizon, which is expected to launch a bid, currently values them at about $8 billion. Verizon purchased dial-up pioneer AOL last year for about $4.4 billion, and AOL chief Tim Armstrong would likely be tapped to run the Yahoo assets along with Verizon executive vice president and president of product innovation and new businesses Marni Walden if a deal was reached. Yahoo CEO Marissa Mayer, who has come under fire as she has been unable to turn around the Internet pioneer in the three years she’s been at the helm, is not expected to remain with the company in a Verizon sale.

The Yahoo assets include its Internet search engine and properties like Tumblr, Bright Roll and Flury.

In addition to Verizon – chairman Lowell McAdam said earlier this year at an industry conference that the assets could be attractive – and Google, other possible bidders include Chinese e-commerce company Alibaba, Softbank  and Time Inc. private equity firms Bain Capital and TPG also are considering bids, according to reports, either alone or with strategic partners.

First round bids are due April 11, according to reports.   

Cable history buffs will turn directly to Chapter 9, titled "A Matter of Trust," the longest chapter in Steve Case's book The Third Wave,hoping for some insights into the $163 billion merger of Time Warner into Case's America Online in 2000. They'll know that the deal quickly foundered, costing chairman/CEO Jerry Levin his job, vice chair Ted Turner (Time Warner's largest shareholder at that time) billions of dollars in lost value; and even giving Case a quick shove to the exit.

Case insists that the book, published this week, is not a memoir, but rather an upbeat guide to entrepreneurial opportunities. He quickly acknowledges that his book deliberately has the identical title as Alvin Toffler's landmark 1980 "Third Wave," which influenced Case's career goals when he graduated from college that year. And he delivers plenty of advice and ideas about launching a business, many of them appropriate to telecom and tech start-ups in cable-related ventures, such as the Internet of Things and tele-health.

Whereas Toffler's Information Age "wave" followed the centuries-long Agricultural and Industrial eras, Case's short chronology starts with "Building the Internet" (1985-1999, although he cites  earlier tech precursors) the "App Economy and Mobile Revolution" (2000-2015) and the upcoming "Internet of Everything." Interspersed with frequent - but not very deep - career disclosures, Case offers valuable tips about business-building in the new era, such as "the three P's": partnerships, policy and perseverance.    

To augment such useful tutorials, the book is laced with personal and some juicy remembrances of his youthful flings with cable and early online ventures.  The little-told story about efforts to persuade John Malone of Telecommunications Inc. to invest in AOL in the early '90s typically demonstrates Case's determination.  AOL wanted both money and a future broadband alternative to its dial-up system.  According to Case, Paul Allen was on the verge of becoming a 20% owner of AOL stock, and Microsoft was threatening with its impending Microsoft Network (MSN).   Case says he made a sweetheart offer to Malone, who was also being courted by Microsoft's Bill Gates to embrace MSN.

Ultimately, Malone ignored AOL and also walked away from MSN. Case says that much later Malone said he regretted missing out on the 20-fold AOL stock appreciation during the dot-com bonanza.

As for the stealthy Time Warner deal, there are few revelations.  Case acknowledges that with its cash trove and market valuation in late 1999, AOL scouted many acquisition possibilities, including Disney, AT&T (again for its broadband), Electronic Arts (for its games) and eBay.  In one of the few "juicy" tidbits, he describes how eBay CEO Meg Whitman "was waiting in adjacent conference room at our headquarters in Virginia" as a back-up deal if "the negotiation deteriorated with Time Warner."  He cites encouraging early chats with Turner and Case's own "absolute belief" that the deal would have worked out if the boom market had continued for a few more years than it did.

The rest of the chapter goes into the subsequent dysfunction of the merger, picking on the culture clashes and Time Warner's insular strategy.  He shares a few stories about his growing frustration with Levin, who held the reigns although Case was the nominal chairman, and with the fallout as Levin was shoved aside.  Case explains why former MTV chief Bob Pittman, briefly considered for the top TW job, was too short-sighted and that Dick Parsons, who eventually took to job, lacked vision.  Of course, as he has said in interviews and speeches, Case put most of the subsequent blame for the deal's ultimate failure on Parson's reorganization of the company. The restructuring  put Don Logan, a long-time Time Inc. magazine executive, in charge of AOL and Time Warner Cable, where he shunned  the online unit. Case skewers Logan for killing what Case believes were ahead-of-their-time projects, such as a pre-Skype communications feature because the existing cable group wanted to push the triple-play.

The book includes the requisite name dropping, from Ahmet Ertegun of Warner Music to "Barry" Obama, a Honolulu high-schoolmate and later the President who invited Case onto several federal entrepreneurial/start-up initiatives. Even Comcast CEO Brian Roberts is mentioned, although in a much later encounter (2015), when - reflecting on the core strengths of different companies - Roberts said, "The culture is the one thing you've got to get right."

And that concept, of course, is one of the underlying messages that Case seeks to promote throughout this self-help volume. After he gets the personal stories out of his system, Case emphasizes the tools that entrepreneurs should use. For example,  he believes that most future businesses will be touched by regulation, which is why "policy" is one of his building blocks. 

Whether it's Über dealing with local transportation rules, drones facing multiple levels of oversight or health and communications regulations, he encourages awareness of the growing role of government, which he considers a necessary burden.  Case offers tips about fund raising in an ecosystems with investment constraints (again: some policy-driven). There are plenty of marketing insights, drawing from his youthful experience as a Pizza Hut development manager, which involved taste-testing pizzas around the country. Barely a decade later, Case was calculating how AOL could run a guerrilla action that leveraged the online hubris of competitor Prodigy (the IBM/CBS/Sears venture).

Case engages in some deserved chest-thumping for his Revolution venture capital project and for the "Rise-of-the-Rest" campaign to encourage entrepreneurship in communities of all kinds -not just in Silicon Valley, the Boston area, New York and the other digital-magnet towns.  And he encourages curiosity and continuing dedication - even when it seems to fail.  He cites his own passion for new digital media after he read Toffler's "Third Wave": Case applied unsuccessfully to graduate business schools with a letter citing his firm belief that "innovations in telecommunications (especially two-way cable systems) will result in our television sets become in an information lifeline...."

Recognizing the short-attention-span community that he helped create, Case's conclusion starts with a shrug, "I won't take offence ...if you've decided to skim this book or skip to the end."  In truth, you can absorb this slim book on short flight: a shuttle along the coasts; or half-way to Denver from anywhere. (And that's even if you linger over photos of the victorious arm waves by Levin and Case on that momentous January 2000 morning.) 

The new "Third Wave" provides perspective for those of us who lived through the telecom rollercoaster of that era plus useful ideas for entrepreneurs who will create the next wave of things we didn't know we couldn't live without.

Timed ahead of the 2016 Upfronts, AOL is pushing deeper into the programmatic TV sector with a “self-serve” buying platform.

AOL, acquired by Verizon last June, said the new self-serve module extends its ONE by AOL: TV managed module that was launched in 2014 and is part of its “unified” programmatic platform, ONE by AOL, introduced about a year ago.

The new self-serve platform, which adds reporting and analytics on the backend, will take aim at a piece of the total U.S. TV ad spending pie, which generated about $74 billion in 2015, Dan Ackerman, SVP of programmatic TV at AOL, said.

TV continues to represent the bulk of the ad marketplace, given its immense reach, and TV ad spending continues to rise, he added, noting that programmatic advertising models are now primed to handle this large-scale arena and to deliver on the same methods and techniques that have made programmatic such a hit in the digital domain.

“There hasn’t been inventory available at scale with TV like there is in the digital space,” Ackerman said.

The new TV-focused, self-serve platform is designed to bring a new level of automation that connects buyers and sellers, while also adding efficiencies and enabling more data-driven targeting and decisioning into ad campaigns that extend beyond age, gender and household income.

AOL, Ackerman said, is in talks with multiple national broadcast and cable TV networks about tapping into its self-serve module, with more than a dozen that have been integrated ahead of the fall TV season.

Omnicom Media Group has been named as the ONE by AOL: TV self-serve module exclusive agency launch partner, and will begin testing on the new platform on behalf of its clients.

“This provides our clients the opportunity to begin to realize the benefits of advanced targeting in linear TV,” John Swift, CEO, North America Investment at Omnicom Media Group, said in a statement. “It is a critical first step in our journey towards programmatic and, ultimately, household level addressability at scale in TV.”

AOL’s product launch arrives amid a flurry of activity around programmatic TV. Last month, AT&T hooked up with Videology on an automated, self-service private marketplace for linear TV advertising. NBCU, meanwhile, launched a linear programmatic sales initiative in February that will be part of its upfront sales.

Verizon Communications, a little more than a decade after it launched its Fios TV and Internet service, is moving quickly toward what it believes is the future of the video industry.

It’s a future that hearkens back to TV’s over-the-air origins, where consumers can get all the bandwidth and content they want with no strings attached.

Verizon appears to be banking that mobility — long a buzzword in the video business, but one that hasn’t yet made a big dent in overall viewership — will take a dominant position in the next several years.

For the past year, the New York-based telco has been on a tear to remake itself into a 5G powerhouse:

• In February of 2015, Verizon agreed to sell Fios assets in Florida, California and Texas with more than 1 million video customers to Frontier Communications for $10.4 billion, a deal that is expected to close March 31;

• Verizon bought XO Communications’s fiber network in February for $1.8 billion;

• It launched FreeBee data, a sponsored data service that allows customers to download and watch certain video content without using up their wireless data plans, in January;

• It launched Custom TV — one of the first successful “skinny” video bundles — in April of 2015, revamping the package this February;

• It launched mobile-only, ad-supported over-the-top video service go90 in October of 2015;

• It purchased online icon AOL in June of 2015 for $4.4 billion.

BIG SHIFT AHEAD

Verizon’s recent moves point to its belief that a major shift in the video business is coming, Craig Moffett, principal and senior analyst at MoffettNathanson, said.

“It seems like they’ve made a complete reconceptualization of the video business inside of Verizon and have decided if there is an opportunity in video, it’s in wireless, location-based advertising,” he said. “If they’re going to win in that business, they’re going to have to disrupt the video ecosystem. It seems to me that they have decided that any ties they have to the status quo are a liability.”

Nowhere in the product set is that more evident than with go90. Launched in October, go90 has been downloaded by about 2 million users, has according to some reports. It was ranked No. 300 among all apps on the iTunes Store and No. 20 against all entertainment apps, according to UBS Securities telecom analyst John Hodulik.

Go90 is different than the other millennial-targeted mobile services in that — for now — it is fully ad-supported, meaning Verizon isn’t charging a monthly fee for the service. Customers can watch about 8,000 on-demand titles and stream content from MTV, Comedy Central, ESPN, Food Network, Discovery Channel, AwesomenessTV and others.

Increasing the number of go90 users is a priority, but it’s not the main point of the service, Verizon chief financial officer Fran Shammo said on a January earnings call.

“The key to us is not the downloads; the key is viewership,” Shammo said. “It’s around content and we will continue to add content that is favorable to all generations of population.”

Later, at the Deutsche Bank Media, Internet & Telecom conference on March 8, Shammo said that the addition of AOL’s 350 million users could help add needed scale to the service.

“Eyeballs will be the winner at the end of the day because the more eyeballs I can get to that platform, the more advertisers that are going to come and want to advertise, and therefore I can monetize the usage,” he said.

That strategy has emerged from Verizon’s past eff orts to pay more and more for additional wireless usage — efforts that haven’t worked in part because disposable income in the U.S. hasn’t really grown since 1991, Moffett said.

“Go90 is not about trying to create a substitute for Netflix,” Moffett said. “They’re not out competing with other video services in the traditional sense; they’re trying to create advertising inventory.

“They need to get customers to spend some time looking at their phones. If they can get customers to spend time engaged with the device, they are highly confident that there is a long list of advertisers who will pay for reaching those customers.”

In a research note, Hodulik recounted a meeting with AOL CEO Tim Armstrong, saying the company estimates there is an $80 billion near-term incremental opportunity in the ad space — $40 billion from video and $40 billion from mobile. AOL held 40 meetings for go90 with advertisers during the fourth quarter, Hodulik said. It will spend 2016 building an audience for the service and expects “real traction this year.”

All this seems like a huge departure from when Verizon launched Fios as a means to tap into the lucrative TV market and preserve what at the time was a rapidly declining wireline business.

When Verizon introduced Fios in Keller, Texas, in May of 2005, it — along with AT&T’s U-verse — was supposed to be the last nail in cable’s coffin. It spent $20 billion on a massive fiber upgrade and unleashed unheard-of data speeds (up to 50 Mbps!) on a bandwidth-hungry public.

Now cable is enjoying a resurgence — Charter Communications and Time Warner Cable both had their first positive video-customer growth in nearly a decade in 2015 — and Verizon’s Fios TV has seen its growth slip.

But Verizon’s reversal of fortune doesn’t mean the Fios experiment was a failure. For many people who follow the company, Fios will remain a key component in Verizon’s new direction and will play an additional role. Verizon’s new mantra is mobility.

Lowell McAdam, Verizon’s CEO, said as much in 2014, telling an industry conference its then-recent purchase of Intel’s OnCue video service would enable it to take Fios content over-the-top and make it mobile on a nationwide basis.

The telco’s strategy is to use its existing network to deliver wired broadband and television service throughout its territory while also serving as a backhaul network for its wireless assets. Chief network officer Kyle Malady said Verizon fiber currently passes about 20 million homes, and the telco has already started trials for the next generation of wireless technology — 5G — with its promised 1 Gigabit-per-second speeds.

In the meantime, the company still sees opportunity in wireline service.

“From what you’ve seen from us, obviously there is no one answer,” Verizon spokesman Ray McConville said. “There is no ‘one-size-fits-all.’ We’ve adapted ourselves to have something for everyone.”

In some ways, Verizon is a walking contradiction. It has said it wants to grow the Fios TV business, yet it sold a huge chunk of video and broadband subscribers last year to a CLEC. In an era when rival cable companies are scrambling to accumulate greater and greater scale, Verizon appears to be taking the opposite stance.

BEEFING UP REGIONALLY

The main thrust behind the recent asset sales has been to cluster its operations in the more densely populated Northeast and Mid-Atlantic regions, Malady said. In addition to being able to target a bigger pool of homes for service, the concentration also makes its network more efficient to operate.

Both video and broadband growth have slowed. Fios TV added just 20,000 video customers in the fourth quarter, its lowest quarterly growth ever, and Fios Internet added 99,000 subscribers, down from 145,000 additions in the prior year.

Shammo said Verizon still sees growth opportunity even in its more-mature Northeastern markets. At about 5.8 million video customers at the end of 2015, Fios TV has about 35% penetration throughout its footprint. That’s about the same as Charter Communications, the cable operator that many in the industry believe has the greatest video-subscriber growth potential of any U.S. incumbent.

Shammo isn’t the only one who believes Verizon can squeeze more growth out of the wireline network.

According to Barclays telecom analyst Amir Rozwadowski, Fios TV is expected to grow to about 5.9 million customers by 2017, up 5% from 2014. At the same time, Fios broadband customers are expected to rise 18% to 7.8 million customers by 2017.

The Fios fiber network isn’t just tethered to residential TV and broadband service; it also carries data traffic between wireless cell sites. That means that Verizon will be ready when video traffic increasingly shifts to wireless, a move many pundits see coming.

According to Cisco Systems’s Visual Networking Index, mobile video traffic accounted for 55% of all mobile data traffic in 2015; by 2020, 75% of the world’s mobile data traffic will be video. That means robust backbone networks will be more important than ever.

“The next five years are projected to provide unabated mobile video adoption,” the report said. “Backhaul capacity must increase so mobile broadband, data access, and video services can effectively support consumer usage trends and keep mobile infrastructure costs in check.”

That’s where the Fios backbone network and the telco’s eff orts to make 5G wireless technology a reality come in.

“At the bandwidths they’re talking about [for 5G], the nodes are going to need to be close together, and they are going to require fiber,” Malady said.

Fiber also becomes an extremely important factor once wireless video traffic increases, as anyone who has tried to stream the season premiere of a popular show like Game of Thrones knows. Wireless streaming is only as good as the pipes behind the towers transferring the data.

“The network behind it is the key, because that’s where a lot of these things get choked at peering points,” Malady said. “It all comes down to having good fiber connections between these places to move the bits.”

But in the bandwidth business, demand eventually outpaces supply. Verizon’s purchase of the XO Communications fiber network will mainly help its enterprise business, but it will also help with wireless backhaul, particularly between smaller cell sites. It’s capacity that Malady said is more than needed in today’s environment.

5G’S FIBER FOUNDATION

“I have been around for 27 years and I haven’t seen the growth curve stop,” Malady said. “It just keeps going up and up and up, and people’s demand for bandwidth continues to grow, and that’s why we think we’re pretty well-positioned with our fiber assets, and that’s why we’re requiring more.”

Touted as the next generation of wireless, 5G still has a way to go, as standards still haven’t been created for the service. But like its predecessors before it — 4G and LTE — 5G is the next evolution in wireless technology, offering speeds 30 to 50 times faster than 4G, reduced latency and improved power efficiency. Verizon has been at the forefront of the technology, beginning field tests of the technology earlier this year and predicting a limited commercial rollout as soon as next year.

“Just like we were out ahead of the market on LTE, we’re ahead of the market on 5G,” Malady said. “By definition, at the bandwidth we’re talking about, cell sites and nodes require a lot of fiber. Fiber is a big piece of the equation.”

Shammo is equally enthused.

“We believe that 5G is near-term, not far-term, and it is going to bring a whole different dynamic to the industry,” Shammo said at the Deutsche Bank conference. “It is going to give another growth profile for this industry.”

AOL, acquired by Verizon Communications last year, has made an acquisition of its own.

AOL this week announced it has snapped up AlephD, a Paris-based programmatic platform company “specializing in publisher analytics and price floor optimization” that will be tied into own, grander programmatic offering -- ONE by AOL for Publishers.

AOL said AlephD will help it drive more data into its platform and drive yield for its publishing partners. Adding price floor optimization, it added, will help publishers squeeze more value from visits to web sites and apps and calculate the “best price for each impression in real time.”

“AlephD will be a key part of ONE by AOL for Publishers, enhancing publishers’ ability to understand, control and optimize pricing and packaging of their inventory and drive greater revenue in an increasingly complex ecosystem trending towards mobile,” the company said.

In tandem with the acquisition, AOL announced the launch of ONE by AOL: Publishers, which supports multiple platforms, including desktops, mobile and over-the-top devices.

“Publishers face many obstacles and challenges in navigating the complexities of today’s media environment, and the walled garden technology solutions available to them today is underservicing their needs to capitalize on the consumer shift to mobile and video,” said Tim Mahlman, president of Publisher Platforms, AOL. “With ONE by AOL: Publishers, AOL is drawing on world-class, publisher-minded teams and technology solutions to redefine monetization and empower publishers to capture the maximum value of their content.”

The Kudelski Group said its OpenTV and Nagra France SAS subsidiaries have filed a patent infringement suit against Verizon Communications and its AOL division over claims that they are infringing on a batch of U.S. patents tied to streaming video services.

The suit, filed in the United States District Court for the Eastern District of Texas, alleges that Verizon and AOL are infringe seven patents owned by OpenTV and Nagra France, and identify a range of products and services, including FiOS TV and its authenticated TV Everywhere services, Redbox Instant by Verizon  (an SVOD service that was shut down in October 2014), Go90, Verizon’s new mobile-first OTT video offering, AOL’s Spot On advertising and streaming video services. Verizon closed its acquisition of AOL on June 23, 2015. 

Update: Verizon said it does not comment on pending litigation. 

Kudelski took control of OpenTV, a company that also specializes in set-top middleware and applications, in late 2009, but sold OpenTV’s advanced advertising business unit to Imagine Communications about a year ago.

The Kudelski Group, headquartered in Switzerland, said it currently holds over 4,500 issued and pending patents worldwide. 

AOL and Publicis Groupe have inked an ad partnership for go90, Verizon’s new OTT mobile video offering.

The deal, they said, grants Publicis’ agencies and brand clients exclusive advertising inventory on go90 for three months beginning in the fourth quarter of 2015, and extends non-exclusively to the third-quarter of 2016. Publicis will also have first access to data segmentation capabilities and new ad units “with full creative support from testing through launch,” and early access to Verizon and AOL data management platform targeting in the first quarter of 2016.

Publicis’ partners will also gain access to a new program from  AOL called Head Start that will provide insight on the look and feel of go90’s user experience as new features are rolled out.

They announced the agreement at AOL’s Future Front event in New York City, kicked off in tandem with Advertising Week 2015.

Go90 recently debuted as an invitation-only beta.Announced content partners include New Form Digital, UphoricTV, ESPN, Comedy Central, VH1, Nickelodeon, MTV, Spike, Food Network, TLC, Discovery Network, NFL Network, HGTV, BET, Investigation Discovery, AwesomenessTV, Collective Digital Studio, Defy, Vice, Maker Studios, Machinima, Fullscreen, StyleHaul, and Tastemade.

“Publicis has been an important advertising partner for AOL for many years, and we are excited to be working together once again to bring new branding opportunities to their customers, as well as relevant and valuable advertising experience to mobile users,” said AOL president Bob Lord, in a statement. “The coming together of premium, curated video in go90, richness in data and automation technology will enable their advertisers to drive conversations with millennial-centric audiences that are, more and more, tuning in through the machine in their pocket rather than in their living room.”

“There is a significant opportunity that sits at the intersection of mobile, video and Millennials, and go90 was developed specifically to connect marketers into this interchange that is quickly becoming the primary screen,” added John Nitti, chief investment officer for ZenithOptimedia, which helped Publicis Groupe lock up the deal. “The consumption shift is rapid and we are happy to be leveraging the lion’s share of this premium real estate on behalf of our clients to help drive their competitive edge.”

Verizon completed its acquisition of AOL in June.

Publicis Groupe offers a a range of services spanning digital (DigitasLBi, Razorfish, Rosetta, VivaKi, Nurun), advertising (BBH, Leo Burnett, Publicis Worldwide, Saatchi & Saatchi), public affairs, corporate communications and events (MSLGROUP),  and media strategy, planning and buying (Starcom MediaVest Group and ZenithOptimedia). 

Looking to broaden its mobile-focused programmatic ad platform, AOL said it has inked a deal to acquire mobile advertising specialist Millennial Media.

AOL said the deal, for $1.75 per share of Millennial Media common stock, will give it a supply-side platform for app monetization and add more than 65,000 apps to its suite of publisher offerings, and bring more mobile ad scale to the ONE by AOL, its unified multiscreen digital ad platform.

The deal, valued at almost $250 million, represents a 31% premium, as Millennial shares closed Wednesday at $1.34 per share. Shares of Millennial Media were up 39 cents (29.10%), to $1.73 per share in pre-market trading Thursday.

Via the acquisition, AOL said it will also have access to roughly 1 billion active unique users globally and expand its cross-screen targeting capabilities and broaden its reach to international markets such as Singapore, Japan, the U.K., France and Germany.

The deal also comes on the heels of Verizon’s acquisition of AOL, giving the carrier a slate of online video content and programmatic ad systems that are expected to play a big role in go90, Verizon’s coming “mobile-first” video offering.

 “As we continue to invest in our platforms and technology, the acquisition of Millennial Media accelerates our competitive mobile offering in ONE by AOL and enhances our current publisher offering with an ‘all in’ monetization platform for app developers,” AOL president Bob Lord said, in a statement.

"By joining AOL, we will be adding additional mobile expertise to AOL's growing technology assets,” added Michael Barrett, president and CEO of Millennial Media.

Founded in 2006, Millennial Media is headquartered in Baltimore, Md., with U.S. offices in Atlanta, Boston, New York and San Francisco, and international offices in Hamburg, London, Paris, Singapore and Tokyo. Millennial Media has built up its own portfolio through acquisitions spanning of TapMetrics, Condaptive, Metaresolver, Jumptap and Nexage.

Millennial Media will become a wholly owned subsidiary of AOL when the deal is closed sometime this fall. 

Entertainment, Media and Communications sector deal values nearly doubled in the second quarter to $76 billion from  $39 billion in the prior period, according to a report by PricewaterhouseCoopers, driven by transformative deals in the Cable ($63 billion), Internet & Information ($6 billion) and Communications ($3 billion) spaces.

Despite Comcast’s decision to abandon its purchase of Time Warner Cable in April, Charter Communications’ decision to step back up to the plate and agree to acquire TWC in a deal the consulting giant values at $56 billion (not including debt) and Verizon’s $4.4 billion purchase of AOL.

Mega-deals once again dominated the list – the seven mega-deals in the quarter accounted for 94% of the deal volume in the period.

Despite the apparent return of the mega-deal, which PwC defines as deals valued at more than $1 billion, the consulting firm was encouraged by what it called the resurgence of smaller, ore innovation-driven transactions.

“…We continue to see innovation and transformation as key drivers of M&A in the sector,” PwC Partner, Entertainment,Media & Communications Deals, Bart Spiegel said in a statement. “When coupled with shareholder pressure on companies to deliver ongoing growth, we anticipate that M&A activity will continue to be robust as we enter the second half of the year.”

The cable sector again dominated the space in terms of total value, with four deals totaling $63 billion. Leading that sector was the Charter-TWC deal, followed by Liberty Broadband’s $4.3 billion purchase of Charter stock (which will assist in financing the TWC purchase) and European telecom giant Altice’s purchase of a 70% interest in Suddenlink Communications, which PwC values at $2.9 billion (again, minus debt assumption.)

The advertising and marketing sector, perennial champs in deal volume, continued that streak in the second quarter with 57 deals valued at $1.2 billion, followed by publishing (37 deals), Internet & Information (28 deals) and Communications (27 deals).

While volumes were down slightly in the ad sector in the period – compared to 60 deals in the first quarter – PwC said there was a rise in the number of transactions involving digital/online focused advertising companies, which accounted for more than 25% of announced deals (up from 20% in Q1’15). According to PwC’s Global Entertainment & Media Outlook: 2015-2019, Internet based advertising is projected to surpass TV advertising by 2018.

After a slow start in Q1, deal volumes in the Communications sector were up more than 50% in the second quarter with 27 deals announced – one of the biggest risers in deal volume of all the EMC sectors. While announced deal values were down compared to $16B in Q1’15, overall deal value remained in the billions as two megadeals in Q2 2015 represented almost the entire $3B of deal value.

Internet & Information services announced deal volumes fell from 42 in Q1 2015 to 28 in Q2 2015 – the sub-sector’s lowest quarterly total in recent history. While volumes lagged to 28 deals from 42 in Q1, deal value increased to $6.25 billion from $2.4 billion in the first quarter, buoyed by two megadeals – Verizon-AOL and LinkedIn Corp’s $1.5 billion acquisition of online education provider Lynda.com.

Verizon’s coming “mobile-first” subscription video service will be network-agnostic, but will “work best” on those operated by the carrier, Marni Walden, EVP and president of product innovation and new business at Verizon, said.

Walden (pictured), speaking Tuesday on conference call following Verizon’s completed acquisition of AOL, shed some light on that OTT offering, noting it will feature on-demand and some live TV when it launches later this summer.

It will run on any network, including those run by competitors, but “will work best on Verizon networks,” she said. 

Walden also confirmed that “ad-sponsored data” will be part of Verizon’s new offering, and that the carrier believes it is “well within the ability to do that” in the wake of the FCC’s new network neutrality rules.

In addition to ad-supported products, Verizon will also offer “some premium offers as we evolve the product,” she said, noting that there are no current plans to provide the service outside the U.S.

Walden said some live content will be delivered on the service via Verizon Wireless’s network using bandwidth-friendly LTE multicast techniques. Instead of delivering unicast streams to each person viewing the video, multicast will rely on a dedicated portion of LTE spectrum to deliver live video to multiple devices that are connected to an individual cell site.

Verizon has announced several content partners for the new service, including ACC Digital Network, Campus Insiders, CBS Sports, ESPN, 120 Sports and Awesomeness TV. 

Roku has locked up an exclusive preview of the first episode of season two of Park Bench with Steve Buscemi, AOL’s original Emmy-nominated series, in the U.S.

The preview, available now on Roku players and Roku TV models via the AOL On channel, became available Thursday (June 4), two weeks before season two of the series is offered on other platforms starting June 18.  

As the name implies, the series, created and starring Steve Buscemi, features Buscemi and his friends sitting around to discuss “the special people, places, and spirit that embody the true essence of New York City.”  Those joining Buscemi in season two include musician Elvis Costello, comedian John Oliver, actress Amber Tamblyn, actress Zosia Mamet, actor Paul Sparks, comedian Robert Smigel as Triumph the Insult Comic Dog, comedian Gilbert Gottfried, and filmmaker Jim Jarmusch, among  

Early access to the premiere of season two of the show, which is produced by Olive Productions and RadicalMedia, provides a bit of a differentiator to Roku, which is competing in the OTT sector against big players such as Apple, Google and Amazon.

“’Park Bench’ is a popular, critically acclaimed original series that I know Roku customers will enjoy viewing before it’s available on any other platform,” said Ed Lee, VP of content at Roku. “Working closely with channel partners such as AOL to deliver these exclusive entertainment experiences plays an important role in differentiating the Roku platform from the competition.”

“We're committed to making our content accessible to consumers to view on connected, over-the-top devices and screens of all sizes,” said Dermot McCormack, President of AOL Video & Studios. “ AOL video views have more than doubled across over-the-top devices compared to last year at this time and since Roku is a leading streaming platform with millions of customers, it is a natural fit for us to deliver an exclusive experience for Roku customers around our Emmy-nominated series.”

In 2001, at the height of the dot com bubble, AOL acquired Time Warner for $164 billion. The giant of content and distribution was diluted (and deluded) by the king of narrowband, just as the broadband Internet was taking hold. We all know how that story ended.

Now, fifteen years later, Verizon intends to purchase AOL for $4.4 billion in cash. On the surface, this deal may seem expensive, if not retro. But viewed through the lens of today’s media landscape, it is strategic, and perhaps even prescient.

We’re at a crossroads: the insurgents are battling the incumbents for control over video’s future. The insurgents—Netflix, Google (with YouTube), Facebook (with Instagram), and Twitter (with Vine and Periscope)—are soaring on the expansive wings of the Internet. Verizon, a classic incumbent, is the nation’s largest wireless carrier. It is also the fourth largest wireline broadband ISP and the sixth largest multi-channel video provider (FiOS).

Yet the three-way intersection of video, wireless, and the Internet is a cornerstone of the future. Of course, subscription revenue will remain important. But the targeted ad business is white-hot, and the mobile Internet is its primary fountainhead of growth. With 108 million wireless subscribers, Verizon is not going to stand by idly while the insurgents feed off its fertile infrastructure.

Long before its 2009 spin-off from Time Warner, AOL was written off by just about everyone. But AOL has reincarnated itself into a credible player in today’s head-spinning environment. Most importantly, it assembled a comprehensive and unified ad-tech suite, including the programmatic and personalized techniques that automatically and efficiently match brands with eyeballs.

Secondarily, AOL owns some popular content such as the Huffington Post, TechCrunch, and Engadget. There’s also AOL On, a video aggregation site with numerous “channels” of original and licensed content.

While AOL’s ad technology is the golden goose, Verizon’s appetite for content ownership remains to be seen. On the heels of the aborted Comcast/Time Warner Cable deal, and the pending AT&T purchase of DirecTV, Verizon may test the regulatory waters by agreeing to sell off certain AOL content assets.

This is not Verizon’s first trip to the wireless video rodeo.

From 2007–2011, it offered V-Cast, using Qualcomm’s MediaFLO technology and dedicated UHF infrastructure. This mobile TV service comprised more than a dozen digital channels broadcast to 3G phones for $10 per month. The wireless giant learned some important lessons from V-Cast’s demise, namely the intrinsic value of the broadband Internet and the importance to consumers of on-demand video.

Last year, Verizon acquired Intel’s OnCue technology, a highly touted user interface with advanced search and navigation. Verizon Wireless has been lining up content with partners such as Viacom and Dreamworks Animation’s AwesomenessTV, a YouTube darling. It has also signed several college sports deals, and paid $1 billion to the NFL for the rights to stream live games to smartphones through the 2017 season.

We will soon see what Verizon has been brewing. Look for a mobile, over-the-top Internet video concoction, fusing live and on-demand content, with subscriptions alongside an advanced ad-tech infrastructure.

Perhaps this incumbent is really an insurgent in disguise.

About the author: Marc Tayer, author of the recently released book Televisionaries: Inside The Chaos and Innovation of The Digital Revolution, is a 30-year veteran of the media and communications technology business. Tayer led the team at General Instrument that developed the first digital TV system and submitted the first digital HDTV system to the FCC in 1990, and, during his career, has served in leadership roles at Motorola, Voom (Cablevision’s pioneering HDTV service), Aerocast, and Imagine Communications, among others.  

The pundits may all be touting how Verizon’s deal to purchase AOL Inc. for $4.4 billion will broaden their mobile video horizons and give them access to content and ad technology that could help revolutionize the online video industry, but there are a handful of other ancient technologies (10 years or more old, this is the Internet), products, services and companies that the wireless giant will inherit as part of the deal.

1.    Moviefone: While it’s hard not to think of Cosmo Kramer whenever you hear the name (“Why Don’t You Just Tell Me The Name of the Movie You Selected?”), Moviefone shed the “fone” part of the business years ago, and is primarily a website where lovers of the moving picture arts can find out what’s playing at their local theaters, stream select free episodes – the premiers of Penny Dreadful, HAPPYish and Nurse Jackie and watch episodes of selected series.

2.    Netscape: Remember Mosaic? No? Then you probably don’t remember the company that introduced that Internet browser, the first of its kind, in 1994. Founded by Internet pioneers Jim Clark and Marc Andreessen, they eventually changed the browser’s name to Netscape Navigator. Netscape was a pioneer in open source code – it started the open source Mozilla project, from which sprang web browser Firefox – and was purchased by AOL in 1998. AOL shuttered the Netscape division in 2003, but its dial-up Netscape Internet Service (a 56kbps offering for $9.95 per month)  and web portal live on.

3.    CompuServe:CompuServe was the first online service to offer Internet connectivity in 1989, but soon lost ground when AOL came on the scene with a radical business model of selling access for a monthly fee rather than by the hour. Purchased by tax preparer H&R Block in 1980, the CompuServe Information Network was sold to AOL in 1998 as part of a complicated deal with MCI Worldcom. 

4.    Weblogs Inc.: A network of about 90 blogs that AOL purchased in 2005, including tech site Engadget, video game site Joystiq, Autoblog and others. Internet pioneer and Dallas Mavericks owner Mark Cuban was an early investor in Weblogs.

5.    AOLbyPhone: Not near a computer and just gotta check your e-mail? AOLbyPhone to the rescue. Using any phone (cellular, wireline, satellite, rotary), and for $4.95 per month, you can dial into the service to hear your e-mail messages read back to you, reply to them in your own voice (audio is sent as an attachment), hear just messages from people you know using the People I Know function and find e-mail by sender. Or you could, you know, press that icon that looks like an envelope and is marked “Mail” on your smartphone. Just saying.  

Looking to amp up its mobile video and over-the-top video strategy, Verizon Communications said it has inked a deal to acquire AOL Inc. for $4.4 billion.

Verizon, which has agreed to buy AOL for $50 per share, said the deal will further its LTE-powered wireless video and OTT efforts and expand its move into digital content and advertising. Tim Armstrong, AOL chairman and CEO, will continue to lead AOL operations after closing, the companies said.

In AOL, Verizon will acquire a portfolio of content brands, including The Huffington Post, TechCrunch, Engadget, MAKERS and AOL.com, as well as a menu of OTT fare targeted to the coveted millennial audience. Of recent note, AOL announced a year-round video content strategy last month that will offer short- and long-form programming across a wide range of screens, and also announced a content distribution and development deal with NBCUniversal.

On the digital ad front, AOL acquired multiscreen and programmatic video ad firm Adap.TV in 2013.

The acquisition also factors in as Verizon prepares to launch a new mobile video service that’s expected to launch in the second half of the year and feature between 20 to 30 channels. Verizon has already signed up several content partners for its coming “mobile-first” offering, including ACC Digital Network, Campus Insiders, CBS Sports, ESPN, 120 Sports and Awesomeness TV.

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

Verizon, he added has been “strategically investing in emerging technology, including Verizon Digital Media Services and OTT, that taps into the market shift to digital content and advertising. AOL's advertising model aligns with this approach, and the advertising platform provides a key tool for us to develop future revenue streams."

"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,” Armstrong added. “ 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."

Verizon said the transaction will take the form of a tender offer followed by a merger, with AOL becoming a wholly owned subsidiary of Verizon upon completion. They expect the deal to close this summer.

Transaction advisers for Verizon were LionTree Advisors; Guggenheim Partners; and Weil, Gotshal & Manges. AOL advisers were Allen & Company LLC and Wachtell, Lipton, Rosen & Katz.

AOL will tackle the NFL Draft with a new digital docu-series that profiles three college football players entering the draft, according to the company.

The Journey to the Draft series, in which NFL Hall of Famer Deion Sanders will serve as executive producer and narrator debuts April 28th with nine episodes, with a final episode scheduled for May 6, according to AOL officials.

Athletes profiled in the series include Leonard Williams, Kevin White and Marcus Peters. The NFL Draft begins April 30.

“Journey To The Draft brings viewers behind the scenes and shows them the emotion and intensity the players experience,“ said Dermot McCormack, President of AOL Video and AOL Studios. “Every episode, we will take viewers inside the plays and politics; the locker rooms, press rooms and dorm rooms; like never before.”