Corporate Finance

Verizon to buy AOL for $4.4 billion

The upstaged all-in-cash deal intensifies the battle for advertising on mobile devices

The upstaged all-in-cash deal intensifies the battle for advertising on mobile devices


Verizon, the largest American wireless provider, announced on Tuesday that it will buy AOL Inc. for $4.4 billion, turning Verizon into a leading player in mobile video and advertising.

The deal values AOL at $50 a share, a 23% premium over the company’s three-month volume-weighted average price. Through the deal, Verizon gets two of AOL’s technologies: its mobile streaming service, featuring live TV, original shows and pay-per-view, and its ability to automatically send targeted ads to mobile devices.

Websites such as the Huffington Post, Techcrunch, Engadget, Makers and AOL.com are also included in the deal.

AOL shares jumped 18% to $50.18 in premarket trade on Tuesday after the announcement of the acquisition. Verizon shares dropped 1.47% to $48.98.

Advertising has become a major revenue stream for AOL. This deal is expected to not only turn AOL into one of the most successful advertising technology companies, but also bolster Verizon’s efforts on mobile platforms and digital advertising in a market now dramatically dominated by Google.


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AP Photo/Paul Sakuma

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