Verizon Buys AOL, Because Two Lumbering Dinosaurs Who Can't Figure Out The Modern Internet Must Be Better Together

from the this-might-get-interesting dept

Tue, May 12th 2015 9:24am — Karl Bode

You might recall that last October, Verizon tried its hand at getting into the media business with the launch of a tech blog by the name of Sugarstring. The bizarre foray into media didn't last long; editors quickly complained that Verizon was prohibiting them from talking about huge tech issues Verizon played a starring role in, ranging from net neutrality to domestic surveillance. After the media ridiculed the hell out of Verizon's ham-fisted disregard of editorial firewalls (or just common sense), the website was quietly shuttered, with the telco saying it was just a "pilot project" it was moving on from.

So what is Verizon's media plan 2.0 going to be? Apparently, it's a little something called AOL. Verizon this morning announced that the company would be buying AOL for around $4.4 billion, stating the acquisition would be supporting the telco's over the top video and Internet-of Things ambitions (read: they wanted AOL's ad empire):

"Verizon is a leader in mobile and OTT connected platforms, and the combination of Verizon and AOL creates a unique and scaled mobile and OTT media platform for creators, consumers and advertisers. The visions of Verizon and AOL are shared; the companies have existing successful partnerships, and we are excited to work with the team at Verizon to create the next generation of media through mobile and video."

Nobody on Earth flubbed the dial-up to broadband era transition quite as spectacularly as AOL did, so being acquired by a telecom operator ten years too late isn't without it's irony. Equally ironic is Verizon suddenly acquiring 2.2 million new dial-up subscribers at a time when it's desperately trying to back away from the fixed-line broadband business (how many DSL lines would $4.4 billion upgrade?). But AOL's a very different company these days, and the acquisition makes sense as a mobile advertising play, even if it just feels weird to see the two companies snuggle up in bed together.

Apparently, current AOL CEO Tim Armstrong will remain in command under the freshly-acquired AOL, which will operate as an independent Verizon subsidiary. There's no declaration of retained editorial independence anywhere, but that may not mean much. From a memo from Armstrong sent to all AOL employees this morning:

"The leadership at AOL is staying and I am staying – enthusiastically, and we made that part of the deal. 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."

Do those "values" and "doing good" include propping up Verizon's role as one of the most vocal and obnoxious opponents to net neutrality on the Internet? Stay tuned. There's some chatter that Verizon may want to spin off or sell off the content companies, just using the remaining ad empire to fuel the telco's new wireless-focus Internet video subscription service expected to launch sometime later this year. If retained, you'd like to think Verizon will play it smart and not aggressively meddle in the daily dealings of websites like The Huffington Post, Engadget, or TechCrunch, but with the telco's generation-long history of aggressively bad ideas (most recently being a foray into undeletable super cookies), you just never know.

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Filed Under: ads, internet, mergers
Companies: aol, verizon

34 Comments

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Ninja (profile), 12 May 2015 @ 8:59am

even if it just feels weird to see the two companies snuggle up in bed together

I hear you. I'm having trouble picturing dinosaurs mating.
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Violynne (profile), 12 May 2015 @ 9:16am

Goodbye, Engadget.

You were a wonderful site all these years.

If you're not separated by the purchase of AOL, then Verizon will make sure you become absolutely useless.
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dfed (profile), 12 May 2015 @ 9:29am

Newsflash: Verizon is now sending upgrade notices to their subscribers in the form of CD Roms that can be run on your home PC! Now get 2 Gigs of Data Free for the first month!
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Anonymous Coward, 12 May 2015 @ 9:36am

Two turkeys don't make an eagle.
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DannyB (profile), 12 May 2015 @ 9:37am

It is NOT ten years too late for Verizon to acquire AOL
It is twenty years too late.
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Anonymous Coward, 12 May 2015 @ 9:41am

The visions of Verizon and AOL are shared;

To make hand over fistsfull of cash while simultaneously screwing as many customers as possible.
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Anonymous Coward, 12 May 2015 @ 9:42am

Re:
Even dinosaurs mating gave birth to young. Verizon and AOL are more likely to devour their young.
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Anonymous Coward, 12 May 2015 @ 9:50am

At least AOL is fire-sale cheap, a tenth of the price that Microsoft bought Yahoo for a few years ago ... or thought they had in the bag.

But will this Verizon-AOL purchase end up the same way as Microsoft/Yahoo or Comcast/Warner-Cable?
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Anonymous Coward, 12 May 2015 @ 9:51am

Re:
They are going to review Verizon phones and services. They will all be wonderful.
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Michael Becker (profile), 12 May 2015 @ 9:52am

Re: It is NOT ten years too late for Verizon to acquire AOL
For some of us 10 years ago is still the 90s. Now get off my lawn kids!
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Anonymous Coward, 12 May 2015 @ 9:53am

Just in case you haven’t cancelled your AOL account we'll give you yet another reason.
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Anonymous Coward, 12 May 2015 @ 10:09am

Re:
Not just subscribers. Everyone in their service area will be offered that with signup.
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Rich Kulawiec, 12 May 2015 @ 10:13am

$4.4 billion, eh?
Maybe they could have used some of that to buy some spare parts for DSL subscribers or to fix the landlines on Fire Island that were destroyed by Sandy.
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Anonymous Coward, 12 May 2015 @ 10:28am

More pre-installed apps on Verizon cellphones.
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Anonymous Coward, 12 May 2015 @ 10:29am

Re: Good Buy!
Tech Crunch and The Huffington Post as well.
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Anonymous Coward, 12 May 2015 @ 10:30am

Re:
I miss the free coffee cup coasters that used to come from AOL.
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Pronounce (profile), 12 May 2015 @ 10:48am

AOL is Verizon's Sony
U.S. government loves media companies. As observed when Sony got so much lovin' by the spooks after their hack (while the average American pensioner that has their ID stolen and retirement account drained can't get so much as a nod to their plight). (And don't try to tell me the NSA doesn't have the identity of every major crime syndicate working the cybercrime angle in their trove of data they've hoovered.) Verizon needs some Sony type lovin' from the Feds if they want to push their agenda through.

Remember it's all a game of money and power.
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John Fenderson (profile), 12 May 2015 @ 10:57am

Re: Re:
I lined most of a wall in my office with them. In total, AOL had mailed me right around 500 of those damned disks. I still find them lurking in the bottom of storage boxes.
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Karl Bode (profile), 12 May 2015 @ 10:58am

Re: $4.4 billion, eh?
Crazy talk!
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Anonymous Coward, 12 May 2015 @ 11:26am

Re: Re: Re:
Ya know, there's always ebay.
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Unanimous Cow Herd, 12 May 2015 @ 11:29am

Maybe..
Maybe they should invest of in some emerging technologies like that new fang-dangled reticulated electric speaking telegraph.
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DannyB (profile), 12 May 2015 @ 11:29am

It's bandwidth envy
Verizon is envious of the speeds that dialup AOL users once enjoyed and would like to improve their network to match.
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Anonymous Coward, 12 May 2015 @ 11:52am

Re: Re: Re:
But it was great during the floppy-disk era 20 years ago, with AOL passing out reusable storage media that would have otherwise cost about $1 each back then.

It was just a shame that the 1.44MB floppy was the last (and biggest) non-propietary portable magnetic storage medium -- before standards-fragmentation allowed CDs to completely take over the market formerly occupied by inherently-rewritable magnetic disks.

After that, AOL disks went straight to the trash.
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John Fenderson (profile), 12 May 2015 @ 12:42pm

Re: Re: Re: Re:
I don't do eBay. Besides, there's a much better use for them: making a really good light show
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phils, 12 May 2015 @ 1:38pm

What -- AOL is still around??
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madasahatter (profile), 12 May 2015 @ 4:01pm

Re:
Don't insult turkeys or vultures lol, The stench from this deal means no Verizon cell service or America Offline.
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nasch (profile), 12 May 2015 @ 4:50pm

Re: Re: Re: Re:
But it was great during the floppy-disk era 20 years ago, with AOL passing out reusable storage media that would have otherwise cost about $1 each back then.

Did they seriously mail out rewritable CDs?
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nasch (profile), 12 May 2015 @ 4:51pm

Re:

But will this Verizon-AOL purchase end up the same way as Microsoft/Yahoo or Comcast/Warner-Cable?

Or AOL/Time-Warner...
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James Burkhardt (profile), 12 May 2015 @ 8:31pm

Re: Re: Re: Re: Re:
No. thats the point, the floppy disks they mailed out were reusable. the CD was not.
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James Burkhardt (profile), 12 May 2015 @ 8:35pm

Re: AOL is Verizon's Sony
Ah. You again. I will try to tell you that even if the NSA has critical metadata on cybercrime, it does not follow that they A) Know they have that data, B) can find that data, C)Have enough of it to determine the identity of everyone involved
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orbitalinsertion (profile), 12 May 2015 @ 11:00pm

Re: Re:
If AOL bought Verizon.
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orbitalinsertion (profile), 12 May 2015 @ 11:02pm

Re: Re: Good Buy!
And they will probably make an ugly mess of them the way CBSi made an ugly mess out of C|NET properties.
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orbitalinsertion (profile), 12 May 2015 @ 11:04pm

Maybe if they would spin off all that dial up to someone other than Frontier...
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Anonymous Coward, 13 May 2015 @ 12:04pm

*Raises Glass to AOL*
At first I was mad a few weeks ago when they killed off WoWInsider.

Now, I'm glad they did so Verizon wouldn't get their filthy hands on it.

I think I'mma go see what I can pull out of the Internet Archive for that site, before it gets yanked completely.
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