In this modern age, the competition businesses face is getting more complex as firms perfect Charles Darwin theory of selection- but this time it is: Innovative Selection- the more innovative changes firms make, the larger their rate of survival. . It is almost easier raising a dead man than raising a dead technology business as the likes of Motorola are struggling to recover from their seeming market paralysis. Innovation or acquisition are now sound options to remain afloat in the market so as to survive the drowning tides of innovation and competition.
On the news this time is Verizon and AOL. Verizon, a leading US telecom firm has made known its intention to acquire the digital company known as AOL. The US telecom giants as announced are in view of making the acquisition which it rates at $4.4 billion. For some time earlier, the rumours of a joint venture seemed more likely but now in the negotiating horizon is the look of full-on purchase. Verizon has internationally made its mark in the niche of broadband and telephone services but now, the US telecom giant no want to add a media content focus to their armory which essentially deals with ads and videos.
AOL on the other hand is renowned largely as one of the forerunners of internet as regards the Web’s beginning concepts of instant messaging and email as well. Also AOL is the company with which many persons enjoyed their early internet connection as far back as in the 1990s. Even up to this moment, AOL still has on its catalogue of services dial-up internet access, with a subscriber bandwidth ranging two million. But speaking critically, the AOL dial-up didn’t help court Verizon.
In 2001, AOL engaged in a merger with Time Warner becoming an independent company in 2009 unveiling a new focus with an orientation towards digital media with a strict priority on acquisitions as well.
The commercial aroma of AOL (as a media company) to Verizon given the conditions that brands including the fact that the likes of Huffington Post, Engadget, TechCrunch as well seated under AOL’s market prominence as well as the dear programmatic advertising technology and video content- is something that would keep Verizon on its suitor’s coat (keep coming). This could help Verizon a good distance as to automated selling and buying of ads which is a magnificent blessing on its broadband and mobile offerings. AOL Advertising enables third parties access to AOL’s digital advertising tools, and then its “Advertising.com” ad network is specifically created to give them a leg up so that advertisers target relevant audiences and then definitely improve on publishing revenue.
“Verizon’s vision is to provide customers with a premium digital experience based on a global multiscreen network platform,” explained Lowell McAdam, Verizon chairman and CEO, in a press release. “This acquisition supports our strategy to provide a cross-screen connection for consumers, creators, and advertisers to deliver that premium customer experience.”
The $4.4 billion cash deal equates to around $50 per share, meaning AOL’s shares shot up by around 17 percent in the wake of the announcement today.
“The combination of Verizon and AOL creates a unique and scaled mobile and OTT media platform for creators, consumers, and advertisers,” said Tim Armstrong, AOL chairman and CEO, who will continue to head up AOL operations. “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.”
While the Verizon deal is not officially finalized yet, which still depends on the usual regulatory approvals, AOL will assume a wholly owned subsidiary of Verizon position when it is all and well completed.