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Verizon bag AOL for £2.8 Billion

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Anyone who came of age in the 1990's will probably remember AOL rather fondly as the leading internet service provider of a bygone age. When internet connections required us to ask our parents permission and actually successfully logging on was something of a feat in and of itself. Back in those days (as a man approaching 30, I feel my use of the phrase to be more than justified) there were two major names when it came to the internet; Yahoo and AOL. Whilst Yahoo is far from the force it once was, it at least managed to spend the 21st century ringing the changes whilst Microsoft and Google began slowly monopolising the world wide web. AOL, on the other hand, appears to be (from a distance at least) a sad facsimile of its former self, so it was only a matter of time before it was sold off.

US telecommunications giant Verizon had agreed to snap up AOL in a deal worth a reported £2.8 billion ($4.4 billion) for $50 per share

It was announced yesterday afternoon (May 12) that the US telecommunications giant Verizon has agreed to snap up AOL in a deal worth a reported £2.8 billion ($4.4 billion) for $50 per share, in an effort to build their digital and video platforms. The acquisition shows that Verizon is serious about its plans for LTE wireless and over-the-top video, and the agreement will also support and connect to Verizon's IoT (Internet of Things) platforms, creating a growth platform from wireless to IoT for consumers and businesses. Whilst AOL might have fallen by the wayside a little (a lot) in the ISP stakes, it remains a leading voice in digital content and advertising platform space, and their partnership with Verizon will be creating a scaled, mobile-first platform offering directly targeted at a global industry work nearly $600 billion.

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The move will also significantly broaden the amount of advertising Verizon can sell, and nets the company some major AOL-owned websites such as the Huffington Post, Techcrunch, Engadget, Makers and (of course) AOL.com. Verizon is obviously following in the footsteps of UK peers like BT and Vodafone, who are striving to become one-stop stops for all internet, phone and entertainment services. The transaction, which is expected to close this summer, will take the form of a tender offer followed by a merger, with AOL eventually becoming a wholly owned Verizon subsidiary. Advisers for the deal on Verizon's side were LionTree Advisors, Guggenheim Partners, and Weil, Gotshal & Manges, whilst AOL advisers were Allen & Company LLC and Wachtell, Lipton, Rosen & Katz.

The transaction, which is expected to close this summer, will take the form of a tender offer followed by a merger, with AOL eventually becoming a Verizon subsidiary

Lowell McAdam, Verizon chairman and CEO, said of the acquisition: “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. AOL has once again become a digital trailblazer, and we are excited at the prospect of charting a new course together in the digitally connected world. 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.”

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AOL's Tim Armstrong will remain at the head of the company

Tim Armstrong, AOL chairman and CEO, will continue to lead AOL operations after closing. He said: “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.”

Verizon is following in the footsteps of UK peers like BT and Vodafone, who are striving to become one-stop stops for all internet, phone and entertainment services

I still remember getting my first AOL compact disk through the mail and using it to hound my parents for an internet connection. That dial-up service (which apparently still has over two million users even to this day) was my introduction to the online world, which would eventually provide not only a gateway into my profession, but a portal through which I fell in love with countless bands, kept in touch with my friends, fragged my fair share of strangers on Counterstrike, and probably stumbled upon more obscene content than I had any right to at such a tender age. I mourn the death of the 'old' AOL I grew up with as it genuinely played a significant part in my development as a functioning member of society. That being said, I am still delighted that the name will continue to live on, at least in some form.

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Benjamin Hiorns is a freelance writer, struggling musician and child of the internet. It just so happens that he found an old AOL CD in his attic the other day whilst searching for some old comic books. It still boots up!

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