Verizon is about to become a big name in the online news and blogging world thanks to its just announced plan to buy AOL in a US$4.4 billion deal. Once the deal closes this summer, AOL will be a fully owned subsidiary of Verizon, giving the wireless and broadband service provider properties such as TechCrunch, The Huffington Post, Makers, and Engadget, along with AOL.com.
Verizon buying AOL in $4.4 billion deal
The purchase is part of Verizon's plan to drive up its LTE wireless video and over-the-top, or OTT, video strategy. Verizon CEO Lowell McAdam said,
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.
Verizon will also be able to leverage AOL for ad-based revenue thanks to the existing viewer base, and expects it can create a powerhouse mobile-first advertising platform.
AOL CEO Tim Armstrong will continue to run the company after the acquisition is complete and sounded optimistic about the deal saying, "The combination of Verizon and AOL creates a unique and scaled mobile and OTT media platform for creators, consumers and advertisers."
Verizon will pay $50 a share for AOL, which makes the total purchase price about $4.4 billion. The deal still needs to get through the usual regulatory hurdles, which Verizon expects will happen in time to wrap up the transaction some time this summer.