Verizon Spends Big on AOL


VerizonMajor telecommunications and MVPD player Verizon is expanding in a big way, spending $4.4B of its hard earned cash to acquire pioneering ISP company AOL.

The move is expected to enhance Verizon’s posture in the video space.

The Associated Press noted Verizon’s desire to be a player in both OTT distribution, a move which already has put it at odds with Disney’s ESPN, as well as entering the mobile video delivery business.

The telco is paying $50 a share for AOL stock, 15% higher than its 5/11/15 closing price, per AP.

Among AOL’s assets are, TechCrunch and Huffington Post.

According to The Wrap, Verizon CEO Lowell McAdam has been talking about just such an acquisition since January. The Wrap believes that the ability of the AOL to support an advertising-based OTT model was key to the acquisition.

It remains to be seen if Verizon will offer subscription or ad-supported OTT or both. The Wrap says that particular door is being left open for the time being.