Verizon to Buy AOL for $4.4 Billion in a Mobile and Video Push
AOL is the owner of multiple online-media properties, including The Huffington Post and TechCrunch, but the brand is usually associated with the ’90s version and its dial-up Internet. Therefore, yesterday’s announcement that Verizon is buying AOL for $4.4 billion may have come as a shock to some people. This major acquisition is a sign that Verizon is making a major push toward mobile-first video and advertising content. In fact, Verizon plans to launch a video service for mobile devices later this year. AOL’s established presence in its ad-tech offering and high-quality mobile video will help propel and maximize revenues for Verizon’s mobile video service.
According to a statement from AOL:
If there is one key to our journey to building the largest digital media platform in the world, it is mobile. Mobile will represent 80% of consumers’ media consumption in the coming years and if we are going to lead, we need to lead in mobile. Over the last 18 months we set a goal of moving AOL into a leading position in mobile, mobile video, and mobile registered consumers. We are approaching 400 million global consumers, we have built one of the best advertising platforms in the world, and we have one of the most talented teams in the world – and now it is time for us to fully open up the mobile frontier.
More than 153 million in the USA will watch TV shows on digital devices at least once per month this year, eMarketer says. That’s almost half of the U.S. population. eMarketer also estimates that mobile ad spending is expected to amount to $28.7 billion this year, up 50% from 2014.
We are in a critical, transformative time for the future of mobile ads and mobile video. Verizon’s acquisition is certainly bold, but as AOL’s CEO Tim Armstrong said, “If we are going to lead, we need to lead in mobile.”