Verizon has reportedly reached out to AOL over possible takeover with the hopes of boosting its mobile video library. As of this writing, Verizon has not made an official offer yet and there has been no official signing of any agreement.
Verizon enticed by AOL’s automated advertising system
Aside from a wider mobile video collection, Verizon is enticed by AOL’s automated advertising system, which would perfectly compliment a new and improved video offering for Verizon, according to reports. Additionally, Verizon would get control of The Huffington Post, TechCrunch, Engadget, and 2.3 million internet subscribers who pay AOL for internet access.
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The mobile phone carrier industry has seen a huge shake up over the past six months or so, as other carriers drop contracts, add new phones, and cut prices to the bone, in order to attract new customers. Additionally, one of Verizon’s biggest rivals, AT&T, has been doing some takeovers of its own. Last year, AT&T purchased satellite TV company, DirecTV (NASDAQ:DTV) for $48.5 billion.
Verizon acquired a mobile video service and technology from Intel, called OnCue, and it hopes the new service will allow the company to draw customer appeal from other video services that competitors are working on.
AOL the fourth most visited website in the US
AOL, on the other hand, still sees 200 million unique visitors a month, which makes it the fourth most visited website in the US, behind Google, Yahoo, and Facebook. However, since its “hay day” when the internet first begin rapidly expanding, AOL has certainly lost some luster and had a few bruising events such as the $124 billion combo with Time Warner Inc (NYSE:TWX), in what appeared to be a desperate attempt to revitalize the business after losing customers nearly 15 years ago.
Ultimately, AOL is not the impressive internet giant that it once was, but it certainly still has some very impressive assets and visitors coming to its site. It still is surprisingly the fourth most visited website and being that AT&T already has DirecTV on its side an a joint venture with The Chernin Group, to revamp and revitalize its mobile video offerings, Verizon must make a few gutsy moves in order to stay competitive.
Not too long ago, simply having the largest and best coverage seemed to be enough to outpace competitors and justify lofty prices. However, since the end of summer 2014, a price war broke out amongst the carriers and now there seems to be an all out brawl over which company can provide the most features, coverage, data plans for the cheapest price. This certainly throws Verizon off its game and forcing the company to plan strategic acquisitions, such as of AOL, in order to remain competitive in the eyes of the consumer. Stay tuned for any of the latest information on a potential Verizon-AOL deal.