REPORT: Verizon May Buy or Form Joint Venture with AOL

/ Jan 5, 2015


Well that was quick. In a bid to expand its online content, mobile video, and digital advertising capabilities, Verizon has approached AOL about a potential acquisition or joint venture, according to a Bloomberg report.

There’s no formal proposal on the table and no deal is imminent, the report added, and representatives from both companies have declined to comment.

The move indicates that Verizon is trying to catch up to rival AT&T, which has made its own investments in video. AT&T currently has a deal in place to buy DirecTV for $48.5 billion, and last year it partnered with The Chernin Group to launch Otter Media, a $500 million joint venture to develop, acquire, and launch over-the-top video services.

AOL would help Verizon on this front. The digital-media giant has a booming video network, which recently topped 100 million unique viewers in the US for the first time, good enough to rank second in comScore’s monthly charts.

Since acquiring for more than $400 million in 2013, AOL has also looked to rapidly build its video-ad offering, with a focus on programmatic advertising. With the launch of its One by AOL platform, the company hopes to serve as the de facto engine for advertisers to place their video ads on sites and platforms owned by AOL and across the web.

According to Bloomberg, Verizon is primarily interested in AOL’s programmatic ad technology, which could be paired with a future online video product.

That product could be the internet-based pay-TV service that Verizon is said to be building. In early 2014, Verizon acquired OnCue, an internet-TV platform originally built by Intel, to serve as the centerpiece of such an offering.

It’s unclear yet when Verizon would launch the service. Dish Network and Sony, its competitors in this burgeoning internet-TV space, have already unveiled their products.

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