Verizon buys AOL for $4.4bn
Verizon Communications, the largest US wireless provider, is to take over internet pioneer AOL.
Verizon Communications, the largest US wireless provider, is to take over internet pioneer AOL for $4.4bn. AOL's most famous assets include the Huffington Post and the On Network video platform. AOL will become a division of Verizon, and current AOL chief executive Tim Armstrong will remain in charge. AOL shares rose 18% on the news ofthe deal.
What the commentators said
These sound especially attractive to Verizon, added Miriam Gottfried in The Wall Street Journal, because both competitors and regulators are giving its core mobile business a hard time.In the meantime, Google and Facebook are capturing the lion's share of the revenues in the fast-growing market for digital video advertisements.
Because people are watching more and more television and videos on their mobiles, AOL "basically gives Verizon a stake in the future", said Jim Edwards on uk.businessinsider.com. There are few synergies (opportunities for cost-cutting) here, however, and "getting these two firms to work together might be difficult". Still, if it doesn't work out, concluded Osborne, at least it won't sink the ship: Verizon is worth £200bn.