In a move that signals the ascendance of mobile in the media world, Verizon Communications is buying AOL for $4.4 billion.
Verizon said the acquisition is designed to provide video that can run over both its LTE wireless and over-the-top video platforms.
"Verizon's vision is to provide customers with a premium digital experience based on a global multiscreen network platform. This acquisition supports our strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium customer experience,” said Lowell McAdam, Verizon chairman and CEO.
“AOL has once again become a digital trailblazer, and we are excited at the prospect of charting a new course together in the digitally connected world,” said McAdam. “At Verizon, we've 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."
AOL last month signed an extensive distribution, development and data deal with NBCUniversal. NBCU content will be distributed across AOL’s online platform and NBCU would sell those ads.
For AOL, the deal marks a big change from when the online company was an unwanted part of Time Warner.
"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 Tim Armstrong, CEO of AOL, who will continue to lead AOL operations after the deal closes, according to the companies. “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."
The transaction is subject to customary regulatory approvals and closing conditions and is expected to close this summer.
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Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.