The Wall Street Jrounal reports the all-cash deal values AOL at $50 a share, a 23% premium over the company’s three-month volume-weighted average price. AOL shares rose 18% in premarket trading to $50.27. Verizon shares fell 1.6% to $49.
The acquisition would give Verizon, which has set its sights on entering the crowded online video marketplace, access to advanced technology AOL has developed for selling ads and delivering high-quality Web video.
Tim Armstrong |
AOL eventually grew to more than 20 million dial-up subscribers and consummated a $183 billion megamerger with Time Warner Inc. in 2000. The company’s value dissipated quickly after the dot-com bust and ultimately Time Warner spun out AOL in 2009.
Under the leadership of Tim Armstrong, a former Google Inc. executive who took over as chief executive of AOL in 2009, the company has invested heavily in ad technology—including an automated, or “programmatic” platform that allows marketers to bid for inventory electronically. In 2013 AOL purchased Adap.tv, an “exchange” that connects buyers and sellers of online video advertising.
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