Hear that sound? No, not the screeching ping of connecting to the Internet in the '90s. It's the sound of marketing to come. On Tuesday, telecom giant Verizon announced that it was set to acquire Internet pioneer AOL — to the tune of $4.4 billion dollars. Why would they pay so much for what most would consider a total has-been? It's all about the marketing, of course.
The first reason is content. It really is the king, isn't it? Ever since mostly getting out of the internet providing game, AOL has been focusing on curating several different content hubs. Verizon would seem to be acquiring AOL in part to pair those content creation hubs with their wide internet, television and mobile distribution networks.
In a press release, Verizon chairman and CEO Lowell McAdam said "Verizon's vision is to provide customers with a premium digital experience based on a global multiscreen network platform. This acquisition supports our strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium customer experience. So will Verizon's television service soon be featuring exclusive new channels from the likes of the Huffington Post, Engadget or TechCrunch (all AOL content platforms)? Time will tell.
The second driving motivation behind Verizon's move is the desire for a programmatic ad platform to tie it all together. Now that they hold both the channels and the content, the only thing that could make those two stronger would be a winning cross-channel ad network. Facing competition from massive players like Google and Facebook's new Atlas platform, Verizon hopes that AOL's in-house programmatic network - One - will be able to compete. And it just might, now that it's aligned with Verizon's massive database of customers and subscribers. So now a potential customer could see the same commercial while watching on-demand TV, then later when browsing the web on a Verizon phone.