Verizon announced on May 12th 2015 its plans to buy American Online, AOL for a staggering amount of $4.4 billion, or $50 a share.
Image: company website
With the combination of one of the biggest mobile network provider and a topmost content producer, the deal is aiming to create a frontrunner in the digital media business. AOL will be operating as a distinct division under Verizon. AOL, based in New York, is the online video service, contents and ads provider that is involved in the development, growth and investment in brands and web sites.. Tim Armstrong is the current CEO. The company provides its services to consumers, publishers, and advertisers. AOL merged with Times Warner in 2001, in a deal that was valued at $160 billion. The merger turned out to be disastrous.
As the users are increasingly watching videos on their laptops, mobiles and tablets, this creates and opportunity to sell advertisements against the video streaming. Verizon wants to leverage this opportunity. Also, as a part of the deal, Verizon will get access to AOL’s websites like The Huffington Post, Engadeget and TechCrunch. The websites currently has 200 million unique monthly visitors combined. It’s also receiving the programmatic advertising technology of AOL. The deal also includes the video and original content of AOL, like ‘The Future Starts Here’ and Emmy-nominated series Park Bench with Steve Buscemi
Price of the deal: $4.4 billion
1. Searched for all the acquisitions of 2015 from various websites till July. Narrowed the research to include only the cloud based services, IT services, social media, ecommerce acquisitions.
2. Ranking done on the basis of the price of the deal. I wanted to include the synergy created as another parameter but did not know the way to quantify the same.