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Five reasons why Verizon is buying AOL

In the US, AOL was best known in mid-1990's for introducing dial-up Internet connections. So why is the world's largest telecom company buying AOL?

twitter-logo Venkatesha Babu        Last Updated: May 12, 2015  | 19:39 IST
Five reasons why Verizon is buying AOL

Verizon has announced that it is buying AOL (formerly known as America Online) for $4.4 billion.

In the US, AOL was best known in mid-1990's for introducing dial-up Internet connections. So why is the world's largest telecom company buying AOL? Business Today explains:

1. There are still a handful of AOL dial-up customers: It may be hard to believe this in 2015, but there are still some people who pay money for AOL to dial up and connect to the Internet. Verizon will be able to shift them easily to its network.

2. The content play: AOL has a host of well-known content play through Huffington Post, Engadget, Techcrunch and Stylelist, which attracts a lot of traffic and eyeballs.

3. Advertising technology: AOL has a powerful advertising technology platform, which some analysts consider is only exceeded by Google. AOL offers technology tools for buyers, sellers and analytics. This is growing at a fast rate and Verizon would be interested in this because of the reason number four.

4. Digital video service: Verizon has indicated that it wants to become big in the digital video service space especially with regard to mobile video. AOL would help Verizon in this, as it knows all about monetising on this front.

5. Other suitors: This was a widely speculated deal which has been in the works for nearly six months. It is believed that Yahoo considered AOL either for a merger or a buyout. AOL has certain properties in India through partners like Bennet Coleman Company Ltd. Verizon's acquisition would help AOL scale its content properties further.

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