Verizon buys AOL for 4.4 billion and becomes new media giant
The web stars of the 1990s haven’t said their last word. AOL is to be acquired by Verizon, the second American telecom operator, with whom an agreement has been concluded. The transaction will be carried out at a price of $ 50 per share, bringing the total amount of the transaction to $ 4.4 billion (3.9 billion euros). Tim Armstrong, CEO of AOL, will continue to lead the company. Founded in 1985, AOL had passed in 2000 – in a context very different from today – under the bosom of Time Warner which had then disbursed 164 billion dollars, to part with it nine years later.
A large media portfolio
With this takeover, the telecom operator announces that it wants to strengthen itself in online content and in particular in video over-the-top, that is to say outside the traditional circuits. But Verizon also gets hold of a large media portfolio pure players. These include in particular the Huffington Post – acquired in 2011, its audience exceeds that of the New York Times -, TechCrunch (acquired in 2008) and Engadget, both specializing in technological news, or simply the AOL.com portal, the 41st most visited site in the United States according to Alexa Rank.
” Verizon’s ambition is to provide customers with a quality digital experience, based on a multi-screen platform “Said Lowell McAdam, CEO of Verizon, who had already mentioned AOL as a potential partner last January. ” Verizon is a leader in connected mobile and OTT platforms, and the combination of Verizon and AOL creates a unique mobile and OTT media platform for creators, consumers and advertisers Adds Tim Armstrong.
Reinforcement in programmatic advertising
If its flagship offer for the general public is based primarily on its messaging, it is in advertising that AOL has strengthened over time. The group has also increased its acquisitions and agreements last year. In September 2014, a partnership was signed with Publicis in programmatic and television advertising. In January, AOL paid more than $ 90 million to buy Gravity, specializing in the personalization of content, advertising or not. AOL also acquired PrecisionDemand, a start-up developing advertising targeting tools in linear television a few months later, as did Vidible, which specializes in programmatic video.
In Q4 2014, approximately 40% of AOL’s non-search ad revenue was from programmatic, and more than 50% of its total ad revenue was multi-screen. In the end, over the first three months of the year, AOL achieved $ 625.1 million in revenue, up more than 7%, for a net profit of $ 7 million.