Verizon Communications have entered into another large acquisition by making a bid for AOL in a deal that is valued at 4.4 billion dollars. This marks the second time that AOL was purchased by a large company with Time Warner acquiring AOL as part of a mega acquisition at the height of the stock market bubble.
AOL has transformed itself from a dial up internet service provider with a number of internet subscribers to a company that holds many media assets and owns proprietary software for placing ads onto websites. What appears to have particularly attracted Verizon is the technology which would enable Verizon to place videos on mobile devices easily and more efficiently and to potentially generate revenues from this placement according to Keith Mann. Further, AOL is viewed as a leading media and advertising provider and owns some notable news websites such as the Huffington Post.
Many followers of the deal believe that the deal between Verizon and AOL was inevitable and that it makes sense for both parties. Further, they indicated that the deal has a high chance of being approved by regulators and no significant disposal of assets by Verizon appears necessary to avoid anti-trust measures by regulators.
Further, the deal shows that Verizon is pushing for future growth as the deal comes after an deal in which Verizon acquired the portion of Verizon Wireless that thy did not own from Vodaphone. Compared to AT&T’s c proposed acquisition of Direct TV, the acquisition of AOL by Verizon seems more forward looking in scope and vision.