Six years after spinning off from Time Warner, an independent and resurgent AOL announced today it will be acquired by Verizon for $4.4 billion.
The acquisition is a huge content and advertising coup for Verizon, which will retain AOL's structure and leadership, including CEO Tim Armstrong.
"The deal means we will be a division of Verizon and we will oversee AOL's current assets plus additional assets from Verizon that are targeted at the mobile and video media space," Armstrong wrote in a memo sent to AOL staffers this morning. "The deal will not change our strategy–it will expand it greatly. The deal will give our content businesses more distribution and it will give our advertisers more distribution and mobile-first features. The deal will add scale and it will add a mobile lens to everything we do inside of our content, video, and ads strategy."
While many consumers likely still think of AOL in terms of its early days as an Internet portal with dial-up access (which is still a $182 million revenue source for the company), it has grown in recent years to become a sprawling collection of content creators and advertising services.
Most notably, AOL acquired The Huffington Post in 2011 (for $315 million), less than a year after buying popular news site TechCrunch. Since then, most of its acquisitions have been advertising- or video-based, such as Adap.tv in 2013 (for $405 million), along with Convertro ($101 million) and Vidible ($50 million) in 2014.
Armstrong noted in his memo that he believes AOL and Verizon are a good fit in terms of everything from strategy and technology to culture and focus on diversity:
We have the opportunity to build a unique and globally scaled media technology company with the scale and resources we need to make that happen. Verizon and AOL are very large partners today–in content, in ads, and in the technology. We know their team well and they know our team well. The cultures share very similar values and are both working on very similar ways to do good while doing well. Diversity and women's leadership are at the top of both companies' agendas and we look forward to having a consumer and industry impact on those important issues.
The future in front of AOL and the industry requires scale, mobile, and video – and partnerships. In our lifetime, we will see the connection of the world on very large and very fast networks – and to play in that world with our strategy requires us to take the natural steps to secure our ability to shoot for the stars. This deal is aimed at the stars and we are going to pursue the joint vision of building the most significant media platform in the world.