4 Takeaways from the Verizon/AOL Merger

This isn't about content. It's about advertising.

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In case you missed it (you didn’t miss it), Verizon made official its bid to buy AOL for $4.4 billion today.

Har har har. Jokes about CDs and dial-up times aside, this is a big deal. “Experts” and observers alike, however, seem to disagree on why it’s a big deal.

Here are a few takes via ourselves and the people we follow.

1. This is not about content; it’s about advertising

Of course the advertising would have nowhere to live without editorial. But the real value of AOL–to Verizon, at least–lies in its ad platform and its ad placement software.

What does this mean to PR? Well, for one, the CEOs of your ad tech clients FINALLY have something to talk about in major publications!

Also:

OK, that’s a little harsh. But Mr. Bayers is onto something.

2. …because delivery venues are more valuable than the content that lives on them

Quite a few people pointed out that the price Verizon will (presumably) pay for AOL is very close to the price Facebook offered for Snapchat nearly two years ago.

Think about that: a content empire employing hundreds of writers and ad sales teams is worth about the same as a delivery app that primarily deals in pics of people making funny faces.

Some other numbers from Kia Makarechi of Vanity Fair:

Those margins may be ridiculously low, but someone will win the ad tech game–and Verizon bets that this someone will be AOL.

3. Still, content also wins

Some say AOL chief Tim Armstrong attributes Verizon’s interest to all the content his company creates: HuffPo, TechCrunch, Engadget, etc.:

But, As Kara Swisher reported this morning, Verizon isn’t really all that interested in owning The HuffPo–and the details remain a bit sketchy on the “content” front.

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4. Mobile, mobile, mobile

The key feature of AOL’s ad tech service is that it is mobile-friendly. From the AOL statement, as shared by Gizmodo:

“If there is one key to our journey to building the largest digital media platform in the world, it is mobile. Mobile will represent 80% of consumers’ media consumption in the coming years and if we are going to lead, we need to lead in mobile.”

It would seem that the media equation of the future will revolve around mobile-friendly advertising technology.

Content won’t have to stretch too far to adjust to its role as a supporting player, though; seen from one angle, newspapers and news broadcasts have always been collections of ads surrounded by original reporting.

So this is really just a natural progression, isn’t it?