Tuesday, June 23, 2015

AOL Now Officially A Verizon Company

Once AOL was the lead platform to access the internet.  The movie, You Got Mail, was a love letter to the company's email service and the familiar voice was known by all.  And AOL, once so powerful, that it went on to purchase Time Warner.  But all good things must come to an end and as the industry quickly changed and dial up was no longer the means to connect, the value of AOL dropped precipitously.  At the end of the day, Time Warner spun AOL off into a separate company and divorced themselves completely.

Today, AOL is now officially a Verizon company.  Per Multichannel, "Verizon Communications said it has closed its proposed $4.4 billion acquisition of AOL, a move that aims to beef up Verizon’s mobile, over-the-top video and advanced advertising strategies." No longer an e-mail favorite, AOL's main attraction seems to be content with the Huffington Post a favorite.  Along with its powerful ad technology, Verizon hopes to capitalize on the yang of content to their yin with cellular distribution.  Is there synergies that can be better monetized?  Certainly, the strategy is aiming to do just that. 

While AT&T pushes ahead with a DirecTv acquisition and Comcast expands its content and distribution platforms in various ways, Verizon is left trying to grow the digital content space.  And the AOL acquisition may not be enough.  I suggest looking at other content companies.  Could Netflix be a future acquisition target?  Could Hulu be back on the merger table?  It seems that the direction for Verizon is to continue to expand on this front in order to remain competitive in this rapidly changing space.  As for the AOL brand.  Don't be surprised if it gets phased out in a year or two.  The once powerful Prodigy and Compuserve brands are already just a footnote in the history of the internet.  AOL is likely the next brand to vanish.

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