Verizon Communications Inc. (NYSE:VZ) the network carrier is apparently engaged in private talks with AOL, Inc. (NYSE:AOL) to carry its mobile and video offerings. While there is yet to emerge a formal announcement by both companies, Bloomberg news reports that the further details are to emerge anytime soon.
For Verizon, the automated ad-trading platform that AOL has built for buying and selling ads online is the main attraction.
The opportunity of a merger and acquisition could convert into a profitable venture for Verizon. As it looks beyond being a network carrier and attempts to gain pole-position in online platforms, the acquisition would lead to ownerships of the AOL’s stakes in the Huffington Post, Engadget as well as TechCrunch.
According to latest data from ComScore Inc, these three internet properties roughly draw 200 million unique visitors per month, placing them just below the Facebook Inc (NASDAQ:FB) or Google Inc (NASDAQ:GOOG) visitors.
Verizon has been slowly acquiring and building expertise on three key verticals, mobile video, online content, as well as advertising. It has begun to integrate its technology acquisitions such as OnCue from Intel Inc, Edge Cast Networks Inc into a seamless mobile-video service.
For Verizon, 2014 has been a mixed bag. However, 2015 appears to hold strategic significance, for, AOL acquisition would allow it to move quicker into online-video services in direct competition with AT&T and The Chemin Group’s online-video offerings.
AOL’s recent focus in developing its ad technology, such as the acquisition of $418 million purchase of Adap.tv Inc, is expected to fetch profits in the near future.
Thus far, there have been activist shareholders on AOL’s board who have been demanding, AOL explore new partnerships. Starboard Value VP had proposed that iAOL seek out Yahoo! Inc (NASDAQ:YHOO) as an acquirer. Considering the activist shareholders sway, it will not be soon before AOL will have to concede and become part of larger technology group. It could well be Verizon soon, if current news reports are an indication.
