Verizon and AOL: It’s All About OTT

By Karen Fratti Comment

This morning, Twitter is abuzz with dial-up jokes about Verizon buying AOL for $50 bucks a share, or $4.4 billion dollars.

While the  “can you hear me now” quips are pretty hilarious, the buy is more about mobile, advertising, and OTT offerings. From Verizon’s official statement:

AOL is a leader in the digital content and advertising platforms space, and the combination of Verizon and AOL creates a scaled, mobile-first platform offering directly targeted at what eMarketer estimates is a nearly $600 billion global advertising industry. AOL’s key assets include its subscription business; its premium portfolio of global content brands, including The Huffington Post, TechCrunch, Engadget, MAKERS and, as well as its millennial-focused OTT, Emmy-nominated original video content; and its programmatic advertising platforms.

At the New Fronts last week, AOL announced a partnership with NBC Universal to create original content and distribute it together. Paired with Verizon’s recent moves in offering tailored, skinny cable bundles, buying AOL is simply good strategy. As Jim Edwards puts it in Business Insider:

AOL basically gives Verizon a stake in the future: It gives its customers something to look at after it has sold them the internet access that gets them there, and after its stores have sold them a phone to look at that stuff on.

So go ahead and make the dial-up jokes, but Verizon’s getting serious about its OTT game.