Months after rumors of a Verizon-AOL tie-up surfaced, the telecom giant has finally made the buy.
It’s now official: Verizon is buying AOL for $4.4 billion. The tie-up between the telecom giant and the tech company of old comes some time after rumors of a merger first began to surface that AOL was ripe for acquisition, potentially by Verizon or Yahoo. This speculation cast the long-troubled AOL as a sort of digital advertising superpower, making the company particularly attractive as ad dollars shift from television to the web. AOL also dabbles in web-original video content, ranging from content for its blog properties like Engadget and TechCrunch, to standalone TV-style shows. The company also still has a strong business in dial-up internet service, which brings in around $40 million in revenue for the company each month. Over 2 million people continue to pay for dial-up from AOL.
Once a darling of the tech industry, AOL helped to usher in the internet age, largely through the use of those ubiquitous free trial discs that flooded mailboxes in the 1990s. Just before the tech bubble burst, AOL announced a mega-merger with Time Warner. The resulting company, AOL Time Warner, never lived up to expectations and was hit especially hard by the dot-com bust. Just 10 years later, AOL and Time Warner parted ways, putting an end to what was widely considered one of the worst corporate mergers ever. Verizon’s plans for AOL seem to revolve around digital advertising and video content, so it’s unlikely that we’ll see a repeat of the disaster that was AOL Time Warner, but many consumers and experts can’t help but notice some similarities regardless. Others believe that this purchase has more to do with Verizon’s upcoming virtual pay-TV offering that is set to be officially announced soon.