Well, this is an interesting way to start a Tuesday.
Verizon Communications, parent company of Verizon Wireless, has announced that it’s going to buy AOL for $50 per share. That works out to a total of around $4.4 billion. Verizon says that the deal will help to push its 4G LTE wireless video efforts as well as its over-the-top video and Internet of Things strategies.
Here’s what Verizon CEO Lowell McAdam had to say about the AOL deal:
“AOL has once again become a digital trailblazer, and we are excited at the prospect of charting a new course together in the digitally connected world. 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.”
The Verizon-AOL deal is subject to regulatory approval, and it’s expected to close in the summer of 2015. Once it does, AOL will become a wholly owned subsidiary of Verizon, and current AOL CEO Tim Armstrong will remain as the head of AOL.
The deal is a big one, giving Verizon access to AOL’s various publications, original video content, advertising platforms, and more. We’ll have to wait to see exactly what effects this deal will have on Verizon Wireless, but Verizon as a whole can use AOL as a new source of revenue, similar to how AT&T has been making a big push into Mexico lately by acquiring two major Mexican carriers.