Verizon buying AOL for $4.4 billion, calls it a digital trailblazer

AOL logoVerizon today announced it will buy AOL for $4.4 billion, with CEO Lowell McAdam saying the once-great "AOL has once again become a digital trailblazer."

Verizon will get into bunch of different businesses by virtue of owning AOL, assuming regulators approve the acquisition. AOL still has more than 2 million dial-up Internet customers, with average quarterly revenue of about $21 per subscriber. AOL is also "a leader in the digital content and advertising platforms space," Verizon said.

Perhaps of most concern to anyone who reads news sites, Verizon noted that it would own AOL's "premium portfolio of global content brands, including The Huffington Post, TechCrunch, Engadget, MAKERS and AOL.com." (Re/code reported that AOL could spin off the Huffington Post content unit.)

Verizon briefly got into the news business last fall when its cellular subsidiary, Verizon Wireless, launched a tech news website called SugarString. The site tried to hire some real journalists but was widely mocked because it banned stories about US spying and net neutrality. Verizon quickly shut down SugarString after the controversy.

We asked Verizon this morning if it plans to limit what topics AOL-owned news sites may cover. "[AOL CEO] Tim Armstrong will continue to lead AOL after this transaction closes, and its expected he will continue to manage the media properties the way he does today," a company spokesperson told Ars.

Verizon's press release said the "acquisition further drives its LTE wireless video and OTT (over-the-top video) strategy. The agreement will also support and connect to Verizons IoT (Internet of Things) platforms, creating a growth platform from wireless to IoT for consumers and businesses."

McAdam said Verizon 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. AOLs advertising model aligns with this approach, and the advertising platform provides a key tool for us to develop future revenue streams.

Verizon said the merger is expected to close this summer. AOL would be a wholly owned subsidiary, with CEO Tim Armstrong still leading its operations.

Armstrong noted that AOL already has partnerships with Verizon and is "excited to work with the team at Verizon to create the next generation of media through mobile and video.

Verizon would also be the employer of AOL's "digital prophet," known as "Shingy."

Source: Ars Technica

Tags: AOL, Verizon

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