AOL Is Acquired by Verizon For Its Streaming Content
AOL is being acquired by Verizon in the mobile providers bid to disrupt the media world. Verizon is purchasing the media company for $4.4 billion in cash in hopes of becoming a major media and content player, not on the television but on the mobile phone. AOL's last merger did not go so well when they acquired Time Warner in hopes of getting distribution for its content and ad network. This time they are being acquired but the goal is the same.
Verizon is seeing subscriptions fall and while some business services and premium options are keeping the company profitable, they are hoping to keep their customer intact by adding these new content options. AOLs most notable content site is the Huffington Post but the company also has a very successful mobile advertising network.
Verizon has had success syndicating NFL games on their phones but otherwise has a limited history in content.
The deal for AOL buts the stock at a $50 a share price, 17% higher than the recent close. AOL will only be a small slice of a large content area that still needs additional pieces.
Verizon buys AOL for $4.4 bln