By Sahil Patel
The move is positioned as a way to fuel the growth of the telco giant’s mobile and over-the-top video businesses. AOL’s assets and expertise in mobile content and advertising will support Verizon’s goal of creating a “global multiscreen network platform” that delivers content for consumers wherever they are, and helps advertisers reach them while they’re there, according to Lowell McAddam, chairman and CEO of Verizon.
“At Verizon, we’ve been strategically investing in emerging technology, including Verizon Digital Media Services and OTT, that taps into the market shift to digital content and advertising. AOL’s advertising model aligns with this approach, and the advertising platform provides a key tool for us to develop future revenue streams,” he added in a statement.
AOL’s chairman and CEO Tim Armstrong will remain at the helm following the completion of the deal, which will turn AOL into a wholly owned subsidiary of Verizon.
“Verizon is a leader in mobile and OTT connected platforms, and the combination of Verizon and AOL creates a unique and scaled mobile and OTT media platform for creators, consumers and advertisers,” said Armstrong. “The visions of Verizon and AOL are shared; 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.”
The deal is expected to close this summer. It was advised by LionTree Advisors, Guggenheim Partners, and Weil, Gotshal & Manges for Verizon, and Allen & Company LLC and Wachtell, Lipton, Rosen & Katz for AOL.