NEW YORK: US telecoms giant Verizon is paying $4.4bn to acquire AOL, with the digital media business's advertising technology one of the main reasons behind the move.
"Certainly the subscription business and the content businesses are very noteworthy," said John Stratton, Verizon's president of operations in a conference call reported by the Wall Street Journal. "For us, the principal interest was around the ad tech platform," he added.
In a statement, AOL observed that its combination with Verizon "brings us the scale of Facebook and Google", pointing out that Verizon touched 70% of internet traffic across 1.5bn PCs, TVs and mobile devices.
"It allows us to have a big seat at the big table with mobile and OTT [over-the-top] video," AOL CEO Tim Armstrong told Ad Exchanger.
Back in March, Armstrong had promised "bold moves" in mobile and video and last month AOL launched an open, unified programmatic platform aimed at simplifying the digital ad space while also announcing a content sharing arrangement with NBCUniversal designed to facilitate advertising across screens.
Armstrong said that AOL's approach would not change. "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," he wrote in a memo to staff.
Far from changing its strategy, "it will expand it greatly", he claimed.
Advertising Age noted that Verizon has the ability to identify users as they move between desktop and mobile devices and that facility, combined with AOL's ad tech platform, could create an advertising player to rival Facebook.
A note of caution was sounded by some observers who recalled how the now defunct technology site Sugarstring had been backed by Verizon, apparently on condition it did not report issues around US spying or net neutrality.
The Next Web wondered what level of control Verizon might choose to exert over the range of publications it now owns, including the Huffington Post, TechCrunch and Engadget.
Data sourced from Wall Street Journal, TechCrunch, Advertising Age, Ad Exchanger, The Next Web; additional content by Warc staff