Plus Pages

Tuesday, May 12, 2015

Verizon To Pay $4.4B To Acquire AOL

Verizon Communications Inc. is buying AOL Inc. in a $4.4 billion deal aimed at advancing the telecom giant’s growth ambitions in mobile video and advertising.

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
For AOL, the sale is the latest chapter for a company that has redefined itself in recent years as a significant player in digital media and marketing, after originating as a pioneer in the dial-up Web access business and being involved in one of the most disastrous corporate mergers ever.

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.

Read More Now

No comments:

Post a Comment