It’s less than a day after the news that the telecommunications giant Verizon is buying AOL for $4.4 billion rocked the tech and publishing industries, so it’s no surprise that there are still unanswered questions about the deal. Not least among those questions is what will happen to AOL’s digital publishing efforts like Huffington Post and TechCrunch. And, as reported by re/code, AOL CEO Tim Armstrong seemed to hint at the potential that its ‘Brand’ publishing group, could be spun off to a third party.
If that turns out to be the case, it suggests a few things. The first is that Verizon bought AOL primarily to help it expand its wireless video and OTT services. That possibility is supported by AOL’s latest results, which demonstrate that the publishing side grew its revenue by 8 percent while the ad-sale ‘Platforms’ division grew by 21 percent. And in a press release, Verizon CEO Lowell McAdam explicitly noted Verizon had been investing in digital ad tech:
“At Verizon, we’ve been strategically investing in emerging technology, including Verizon Digital Media Services and OTT, that taps into the market shift to digital content and advertising. AOL’s advertising model aligns with this approach, and the advertising platform provides a key tool for us to develop future revenue streams.” The story is still developing, so watch this space.
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