A new alliance between the pipes (Verizon) and content (AOL)? That’s a somewhat caricature but it is true that in proposing $ 4.4 billion (€ 3.9 billion) to buy the AOL group. The acquisition will be in cash. Verizon telecommunications group proposes to pay AOL $ 50 per share, or 17% more compared over AOL Monday, May 11 (and 23% in April). With this offer, the first US mobile operator Verizon wants to get their hands on a major digital media group.
For besides possessing information sites such as the Huffington Post (which publishes a particular French version) and high-tech specialized sites TechCrunch, Engadget and TechCrunc, the bulk of AOL revenue comes primarily from its online advertising. Indeed, the AOL group, which became known worldwide in the 90s by distributing millions of CD delivers hours of slow Internet connection, is today a giant pub. Advertising solutions now represent 45% of its revenues and account for a large part in its growth.
Target an advertising market estimated at $ 600 billion globally
And that is precisely what interests Verizon who, with this acquisition, pass “to the next step in the development of its digital platforms and video.” The goal is to market the best all content proposed by the various sites, portals and video on-demand platform that is being developed.
The alliance of the two companies , if successful, will create a “raised platform offering, mainly directed to the mobile targeting advertising market estimated by [research firm] eMarketer to nearly $ 600 billion globally” said Verizon in a statement.
A new medium-media merger fifteen years after AOL Time Warner
More than ever, the ambition of a rapprochement between the pipes (telecommunication services) and the media remains strong. However, AOL has already been burned by such a project. In January 2000, AOL and Time Warner announced their merger, AOL shareholders owning 55% of the conglomerate created. The AOL ISP then represented the pipes while Time Warner provided the content. But the strategy misfired.
In 2009, by the admission of the failure of their merger, the two groups separate. A new independent, AOL, which has commenced a turn to online advertising around 2007, has gradually interested in the content, buying TechCrunch in 2010 or the HuffPo in 2011. Fifteen years after AOL Time Warner, AOL will Does it finally find the right alchemy in its alliance with Verizon?
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