Verizon’s AOL Acquisition is a Winner

In the two weeks immediately following the announcement of Verizon’s acquisition of AOL on May 12, industry analysts universally praised the strategic logic of the combination for both companies. In 31 blog posts and 110 tweets, analysts consistently noted that AOL’s ad tech assets represent a huge potential value-add to Verizon, especially around mobile ads and content services; and Verizon’s immense resources give AOL a larger playing field.




                                              IT analysts’ blogs and tweets mentioning Verizon and AOL

BIA Kelsey analyst Peter Krasilovsky echoed many others when he wrote of the deal, “it is really all about mobile; video on mobile; and the prospect of converting (or selling) 2.1 million dial-up subscribers that continue to be AOL’s biggest moneymaker. Indeed, AOL has built or bought a powerful arsenal of mobile ad serving and video tech.”

In a similar vein, Seth Ulinski, an analyst at Technology Business Research, commented, “By acquiring AOL, [Verizon] enters two high-growth markets historically dominated by the likes of Facebook and Google: digital advertising and advertising technology (ad tech). Though intertwined, the worlds of digital advertising and ad tech represent separate opportunities and new business lines for Verizon. AOL media properties such as Huffington Post and TechCrunch capture revenue in the form of advertising, while AOL’s suite of ad tech (ONE) provides underlying technology to deliver advertising.”

Most questions in the immediate aftermath of the deal announcement focused on whether, or how much, Verizon truly is interested in AOL’s content assets versus its ad tech platform. Ulinski wrote, “By joining Verizon, AOL gains access to greater resources and timing may be right to shed its Web properties.”

Of course, it escaped nobody that Time Warner failed to make a go of its acquisition of AOL 15 years ago. But as Gartner analyst Andrew Frank advised, “Ignore the déjà vu, this is a new world. That doesn’t mean the deal is sure to succeed, but its odds are a lot better.”

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