Verizon looking at AOL as potential acquisition target

Steven Loeb · January 6, 2015 · Short URL: https://vator.tv/n/3b2b

Update: Verizon CEO says company might partner with AOL acquisition report "not accurate"

Since it's breakup with Time Warner, AOL has transformed itself, specifically when it comes to video ad technology. In fact, the company is set to see double digit ad growth for the first time since all the way back in 2008.

Now that success is paying off in potentially interesting ways, as it seems to have peaked the interest of a potential buyer.

Verizon Communications has approached AOL about a potential acquisition, or a joint venture, according to a report from Bloomberg on Monday. Though no formal proposal has been made to AOL, and no agreement is imminent, sources are already pointing at AOL's video products as the source of Verizon's interest. 

Specifically, Verizon wants AOL’s programmatic advertising technology. Programmatic ad buying allows advertisers to use software to buy and sell digital media, in real time, which gives them much more control over where, and how, their ads run. That is what AOL got when it purchased video advertising platform Adap.tv for $405 million in 2013.

The purchase of Adapt.tv might have seemed a little risky at the time, given that it is one of AOL's largest acquisition ever, even more than the $315 million it paid for the Huffington Post in 2011, but now it seems like a no-brainer. The true mark of its success is that AOL recently went even further into video,purchasing video management and exchange platform Vidible in December of 2014.

Part of the potential deal with Verizon also has to do with Verizon trying to keep in competition with AT&T, when entered into an agreement last year to buy cable company DirecTV for $48.5 billion. The merged companies would have roughly 26 million TV subscribers, making it the second largest cable company, after ComCast's pending merger with Time Warner.

If Verizon did buy AOL, it would gain 2.3 million customers. AOL also owns a host of Internet brands including the Huffington Post, TechCrunch and Engadget. Those sites have a combined 200 million unique visitors per month, making them the fourth-most visited sites in the U.S., behind Google, Yahoo and. Facebook. It is unclear what interest, if any, Verizon would have in those sites.

Obviously this deal seems to be in very early stages, and may not ever develop into anything beyond preliminary talks. But it's an interesting thought as to what the two companies could potentially do together if they combined their resources.

VatorNews reached out to both Verizon and AOL for comment, but neither had anything to say at this time. 

Update:

At the Citi Media Conference Verizon CEO Lowell McAdam was asked about the report, where he denied its accuracy.

“I think AOL, along with lots of other media companies, are potential for us to do partnering, commercial basis or whatever. But to say we are having significant acquisition discussions is not accurate," he said.

“I don’t see us owning a lot of content. We will be an aggregator and a distributor for most of that content.”

(Image source: mashable.com)

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