Verizon Acquires AOL for $4.4 Billion

An acquisition of AOL by Verizon Communications has entered its final stage. Acquiring America Online cost the giant more than four billion dollars in cold hard cash. We also have an internal memo from AOL CEO Tim Armstrong regarding this acquisition.

Digital and video industry development is on the rise as Verizon took over AOL in return for the steep price of $4.4 billion. That of course amounted to $50 per every single one of the shares. Verizon’s wireless strategies and video technology that ever-reaches itself will figure somewhere in the mix. 

As for the Internet of Things, growth is likely to take place there as well. Verizon is all set to expand thanks to this new absorption in its vast and voluminous structure. Everyone knows that AOL is an ad king and digitally devastating enterprise. With a combo of the skills of both Verizon and AOL, the hundred billion dollar planetary advertising industry will get a natural fillip.  

E-Marketing will never be the same again with this new occurrence on the horizon. Among AOL’s contents /4/be included several Net sites and an over the top video platform. Verizon meanwhile will do what it can for its consumers. But AOL is definitely the pioneer which will serve as a catalyst in the overtaking  behemoth’s superstructure. 

Lowell McAdam, Verizon chairman and CEO, said, “Verizon’s vision is to provide customers with a premium digital experience based on a global multiscreen network platform. This acquisition supports our strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium customer experience.”

The owner and CEO of AOL, Tim Armstrong, is to carry on his functions of leading the organization. And he has full trust in Verizon to oversee the smaller firm on a constant basis. In a way nothing has changed yet in a way if you look at it, everything has changed. 

Armstrong said, “Verizon is a leader in mobile and OTT connected platforms, and the combination of Verizon and AOL creates a unique and scaled mobile and OTT media platform for creators, consumers and advertisers. The visions of Verizon and AOL are shared; the companies have existing successful partnerships, and we are excited to work with the team at Verizon to create the next generation of media through mobile and video.”

In an internal memo (via TC), the head of AOL spoke of how his company was the trailblazer in matters of media technology. With tens of thousands of cohorts, the conglomerate had everything to look forward to in the near future. Since mobile services made up the majority of its revenues, this was what the setup wanted to concentrate on.  

And thus the acquisition by Verizon took place in a happy marriage of two modern magical technology groups. The CEO said that the decision was taken after much cogitation and brainstorming. It was not a flippant, spur-of-the-moment fluke. He ended his lengthy message by saying “Let’s mobilize!” which is an apt ending to his pep talk of sorts. 

Verizon to acquire @AOL to create unique and scaled digital media platforms: http://t.co/hyBozRkavH— Verizon (@Verizon) /4/12, 2015

Complete internal memo that AOL CEO Tim Armstrong send to employees, is given below:

AOLers –

As you have heard me say many times over the last 5 years since we became an independent AOL, we are building toward becoming the largest media technology company in the world. While there are search platforms, social platforms, and commerce platforms, we have built a very meaningful media platform and AOL today is a media platform company powering our brands and the brands of over 30,000 partners.

If there is one key to our journey to building the largest digital media platform in the world, it is mobile. Mobile will represent 80% of consumers’ media consumption in the coming years and if we are going to lead, we need to lead in mobile. Over the last 18 months we set a goal of moving AOL into a leading position in mobile, mobile video, and mobile registered consumers. We are approaching 400 million global consumers, we have built one of the best advertising platforms in the world, and we have one of the most talented teams in the world – and now it is time for us to fully open up the mobile frontier.

Today, we are announcing that the largest and most innovative wireless and cable company – and the one investing the most in high quality mobile content – is acquiring AOL with the strategy of building the biggest media platform in the world. The company is Verizon and the deal will game-change the size and scale of AOL’s opportunity. Just as AOL has propelled The Huffington Post, Adap.tv, TechCrunch, and other companies we have acquired, Verizon will propel AOL and comes to the table with over 100 million mobile consumers, content deals with the likes of the NFL, and a meaningful strategy in mobile video.

The decision to enter into an agreement with Verizon was made over a long and thoughtful time period and both companies see significant opportunity to service consumers and customers in a differentiated and exciting way. On a personal level, the decision to go forward with an agreement was predicated on giving our talent the best opportunity to build a multi-decade business that would be deeply growth oriented and aimed directly at the platform shift that video and mobile are offering the world – today and 20 years from now.

There are two important questions you might have at this point in the letter:

1.     What does this mean?

2.     What does this mean for me (meaning you)?

The deal means we will be a division of Verizon and we will oversee AOL’s current assets plus additional assets from Verizon that are targeted at the mobile and video media space. The deal will not change our strategy – it will expand it greatly.  The deal will give our content businesses more distribution and it will give our advertisers more distribution and mobile-first features. The deal will add scale and it will add a mobile lens to everything we do inside of our content, video, and ads strategy.

For you this means growth, it means mobile, and it means compensation that will be equal or better to your AOL compensation. Your benefits will not change in 2015. We will eventually go on Verizon’s benefit plan, but that won’t happen until 2016 or later and we will work with Verizon to make sure the benefits are strong and cover important areas of people’s lives. Your job and what you do on a daily basis should be enhanced by the market opportunity this deal is targeted to capture. The simple answer to the question of “what does this mean for you?” should be, “I just got more resources, more support and more growth opportunity.”

The leadership at AOL is staying and I am staying – enthusiastically, and we made that part of the deal. We have the opportunity to build a unique and globally scaled media technology company with the scale and resources we need to make that happen. Verizon and AOL are very large partners today – in content, in ads, and in the technology. We know their team well and they know our team well. The cultures share very similar values and are both working on very similar ways to do good while doing well. Diversity and women’s leadership are at the top of both companies’ agendas and we look forward to having a consumer and industry impact on those important issues.

The future in front of AOL and the industry requires scale, mobile, and video – and partnerships. In our lifetime, we will see the connection of the world on very large and very fast networks – and to play in that world with our strategy requires us to take the natural steps to secure our ability to shoot for the stars. This deal is aimed at the stars and we are going to pursue the joint vision of building the most significant media platform in the world.

I have been a buyer of AOL over the last 5 years – and that is an investment in one thing – our talent. We have reviewed every hire coming into the company over the last 5 years and we have taken extraordinary risks and faced extraordinary challenges over the last 5 years. There is nothing more meaningful than watching our team turn-around this great company and restoring it to growth when most people had left it for dead.

AOL is back and now we are joining forces with Verizon to build the best media technology company in the world. Let’s mobilize. – TA