The Wall Street Journal is reporting that Verizon is buying AOL for a cool $4.4 billion in cash. The newspaper claims that Verizon's purchase is “aimed at advancing the telecom giant’s growth ambitions in mobile video and advertising.”
The purchase, according to the newspaper, values AOL at $50 a share. Before the US markets opened, the news saw AOL share rise by 18 per cent and Verizon’s fall by 1.6 per cent. The deal will provide “access to advanced technology AOL has developed for selling ads and delivering high-quality Web video,” writes the newspaper. Verizon plans to launch a video service for mobile devices later this year, and it seems that the purchase of AOL may feed into that.
One of the US's leading mobile network providers, Verizon's move highlights just how competitive the mobile market around the globe is. In the UK we've seen the likes of EE and TalkTalk push towards quad-play offerings to diversify their businesses. For Verizon, it seems partnering with a content provider has been felt to be the most valuable way to reach new potential customers. With AOLs large portfolio of websites, including Engadget, TechCrunch and the Huffington Post, it's just scooped up some important tech influencers, too. [Wall Street Journal]
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