Verizon Buys AOL For $4.4 Billion To Create Video Content, Ad-Sharing Mega-Company

verizonaol_logos (1)Old tech and new tech are coming together in a massive $4.4 billion deal, with mobile service powerhouse Verizon Communications buying the brand of the ’90s AOL — a deal that gives the country’s largest mobile phone operator a stronger foothold in the race to create ad-content that targets customers as they move from desktops to mobile devices.

The New York Times’ DealBook reports that Verizon – the nation’s largest mobile phone operator – will expand its already robust portfolio by adding AOL’s collection of media and technology companies in a deal expected to close this summer.

For Verizon, the deal represents a larger presence in the arena of video offerings. While the company already distributes mobile video through its mobile phone network, the array of platforms owned by AOL will give the company an opportunity to provide content through the internet.

AOL, which owns The Huffington Post and other intentional new websites, as well as a once-iconic dial-up Internet business, could offer Verizon an avenue to compete with Facebook when it comes to seamlessly targeting users with internet marketing.

The purchase of AOL will allow Verizon to tap into the former company’s software used to buy ads across the web and to connect user identity across mobile and desktop platforms.

Verizon and other mobile phone companies have struggled in the past to identify users as they move between the products, in part because of the poor performance of cookies on mobile devices, AdAge reports.

“Verizon’s vision is to provide customers with a premium digital experience based on a global multiscreen network platform,” Lowell C. McAdam, Verizon’s chief executive, said in a statement. “This acquisition supports our strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium customer experience.”

AOL CEO Tim Armstrong – who will stay on at the company after the acquisition if it passes regulatory muster –– says that the two companies have a shared vision.

“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,” he said in a statement.

Verizon to Buy AOL for $4.4 Billion in Cash [The New York Times DealBook]
Verizon Buys AOL for $4.4 Billion [AdAge]