Verizon buys AOL in $4.4 billion deal

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The offer values AOL shares at $50, 17% higher than their closing price on Monday.

Verizon is willing to pay the premium to access AOL’s advanced technology for selling advertising and its high-quality web video capabilities as it looks to grow in those two areas, according to reports.

Verizon had announced plans to launch a video service focused on mobile devices this summer, mixing paid, free and ad-supported connect that will stand apart from traditional television.


Fran Shammo, chief financial officer, said its mobile video service would broadcast shorter shows, not necessarily sticking to the usual 30 or 60 minute format, and live stream sports and concerts using mobile phone airwaves.

AOL saw first quarter profits swell in the first three months of 2015 driven by growth in advertising and search revenues.


Revenue from AOL platforms increased 21% compared to the same period last year, while revenues from AOL-owned content dropped 4%.

Verizon’s revenue hit $127 billion last year, while it made a profit of $12 billion.

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May 12, 2015 |
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