Tuesday, May 12, 2015

Is Verizon A Good Fit To Acquire AOL?

AOL needs a partner for growth in the mobile space and Verizon needs to embrace digital content; perhaps, that is the reason Verizon decided to buy AOL.  According to numerous reports, the deal will place AOL under new ownership but continue to be run by current CEO Tim Armstrong.  But the question to ask is whether such a combination can produce favorable synergy?  Verizon has certainly tried before but was unsuccessful in growing the Redbox Instant platform to compete with other subscription video companies like Netflix, Hulu, or Amazon Prime.  AOL offers a different set of digital content brands including Huffington Post, TechCrunch, and Engadget.  So how can Verizon help?

Clearly, Verizon is a telecommunications giant with the financial resources to support AOL brands and their growth strategies.  Verizon also brings the largest mobile platform in the US to assist  AOL in extending out its reach and usage stats.  But helping a horse find water doesn't necessarily mean that it will drink from the trough. Verizon must rely on AOL's own expertise with building and growing digital content brands.  And AOL might need to hire from the outside to gain additional help.

Owning more content will enable Verizon to monetize more of its mobile business and to hopefully enhance its data analysis across both its platform and competitor mobile platforms.   And through a better understanding of the mobile space, to create an even more accessible and intuitive expertise.  With content as king, Verizon hopes to do better to capitalize on content this time around.  For AOL, it seems like a huge opportunity to capitalize its strengths with a more powerful financial popular who is also the mobile leader at the moment.  Let's hope that this acquisition is indeed a good synergistic fit.