Why the Verizon-AOL deal just might work: Mobile video ads are worth a lot

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For many onlookers, Verizon’s $4.4 billion acquisition of AOL  this week echoed another multibillion dollar deal—AOL’s own $162 billion acquisition of Time Warner  more than 15 years ago. That deal famously collapsed before the end of the decade. But Verizon’s move may differ because of one salient fact: there’s a ton of money in the video advertising being increasingly  watched  on mobile devices. “AOL was in no position to monetize Time Warner Online properties last time around,” Rebecca Lieb , of the Altimeter Group, told Ars. “Time Warner, in essence, bought what was then an ISP. The thinking was ‘this Internet thing is going to be big,’ but beyond that there was little synergy. This time around, an ISP, Verizon, is buying a former ISP. AOL is no longer an Internet service provider or a portal. It’s an advertising technology company.” From that perspective, the deal makes plenty of sense. Money is in no short supply for Verizon, and the deal costs less than  half of the company’s total profits in 2014 . Beyond that, Verizon has been trying to launch a video service for years now. It wants a slice of the mobile video advertising market, and AOL can help with its new “ONE by AOL” ad platform . AOL’s media properties may have been the topic of debate on Twitter, but over three-quarters of the company’s revenue came from advertising in 2014. Read 12 remaining paragraphs | Comments

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Why the Verizon-AOL deal just might work: Mobile video ads are worth a lot

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