Verizon Communications is purchasing AOL
Back in May, Verizon Communications announced that it planned to purchase New York-based AOL Inc. for $50 per outstanding share in cash, valuing the latter company at around $4.4 billion. Verizon then confirmed on Tuesday that it is indeed making AOL a wholly owned subsidiary.
According to Verizon, AOL CEO Tim Armstrong will continue to lead the AOL branch after the acquisition deal closes. He will report to Marni Walden, Verizon executive vice president and president of Product Innovation and New Businesses. The President of Verizon Digital Media Services, Bob Toohey, will report to Armstrong.
"Verizon's acquisition further drives its LTE wireless video and OTT (over-the-top video) strategy,” Verizon said back in May. “The agreement will also support and connect to Verizon's IoT (Internet of Things) platforms, creating a growth platform from wireless to IoT for consumers and businesses."
Verizon will now have direct access to AOL’s brands including Engadget, TechCrunch, The Huffington Post, AOL.com and AOL’s OTT original video content. The company will also inherit the 200 million monthly customers who subscribe to AOL’s premium brands, Verizon said.
“AOL is at the center of disruption of how content is being produced, distributed, consumed and monetized by connecting publishers with advertisers on its global, programmatic content and advertising platforms,” Verizon added. “AOL's opportunity lies in shaping the future of the digitally connected world for decades to come.”
AOL merged with Time Warner back in 2000 while the former Internet-based company was still America’s number-one Internet platform. In 2009, AOL was spun off and began purchasing media properties such as TechCrunch (2010) and the Huffington Post (2011). By 2013, the company had begun sinking its dollars into video products such as Adap.tv and HuffPost Live.
In a report by the Huffington Post, HuffPost president and EIC Arianna Huffington was said to have signed a new contract that will keep her in the company for the next four years. She indicated to her staff in an email that HuffPost is in a stronger position now thanks to the acquisition, and that HuffPost can build on its core mission.
TechCrunch reported on Tuesday that all AOL employees will receive a Verizon tablet as a welcome gift. That said, it’s probably safe to say that AOL’s media sites won’t be yanked offline or spun off at this time.
“Today marks a seminal moment for AOL and Verizon as we become the #1 global media technology company, connecting consumers, creators, and advertisers across all screens – online and offline,” AOL said in an open letter.
The acquisition deal between Verizon and AOL is expected to close sometime this summer.
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