Verizon Communica-tions Inc., which plans to launch a national video-streaming service later this year, said Tuesday that it is buying AOL Inc. for $4.4 billion. ADVERTISING Verizon Communica-tions Inc., which plans to launch a national video-streaming service later this year,
Verizon Communica-tions Inc., which plans to launch a national video-streaming service later this year, said Tuesday that it is buying AOL Inc. for $4.4 billion.
AOL owns such digital brands as Mapquest, Huffington Post and TechCrunch, and has developed online advertising platforms that could benefit Verizon’s new streaming service, analysts say.
The deal — which will likely face regulatory hurdles in Washington — will need to be approved by the Federal Trade Commission or the U.S. Department of Justice. Verizon is the nation’s largest wireless provider, and its streaming service is expected to compete for eyeballs with pay-TV distributors as early as this summer.
In announcing the deal, Lowell McAdam, Verizon’s chairman and CEO, said, “Verizon’s vision is to provide customers with a premium digital experience based on a global multiscreen network platform.”
But Free Press, a nonprofit advocacy group that opposes media and telecom mergers, panned the deal Tuesday, saying that Verizon instead should spend the billions of dollars rolling out its FiOS TV and Internet services.
Verizon has said it will halt its FiOS expansion in 2016. It has built its fiber-based fast Internet and TV services in many U.S. communities, but also has bypassed large parts of its territory.
Verizon’s planned acquisition of AOL would be the latest in the febrile telecom sector, which has been galvanized over the last year by Comcast’s proposed $45 billion purchase of Time Warner Cable Inc. — a deal that collapsed in April because of regulators’ opposition in Washington — and AT&T Inc.’s proposed deal for satellite-TV giant DirecTV.
Broader trends in the industry, online streaming, and reluctance by younger Americans to purchase traditional pay-TV packages, are driving such deals.
AOL was founded in 1985 as America Online and bought by Time Warner Inc. in 2001 at the height of the dot-com boom. It was spun out of Time Warner as a separate company in 2009.
