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Closing This Summer: Verizon To Scoop Up AOL For $4.4 Billion
MojoKid writes with this excerpt from Hot Hardware: We learned this weekend that AOL's dial-up business still has over 2 million customers who pay on average just under $21 per month for service. Regardless of how strange that seems to those of us that salivate over the prospects of gigabit Internet, folks are still clinging to 56k modems are adding millions to AOL's bottom line. However, also recall that AOL has a massive digital advertising platform with a heavy focus on the mobile sector and also owns a wealth of popular web destinations including Engadget, TechCrunch, and The Huffington Post. With this in mind, it shouldn't be too surprising that Verizon has offered AOL a marriage proposal. Verizon is acquiring AOL for an estimated $50 per share, which brings the total value of the transaction to $4.4 billion. Here are stories from The New York Times, NBC News, and NPR on the proposed sale, which it's worth noting isn't yet final, and is subject to regulatory approval.
$100 for a 56k modem
Not having to talk to Comcast PRICELESS
Net Neutrality rules require carriers to treat everyone's content like everyone else's - you can't throttle or restrict traffic based on who it comes from or where it's going.
However, as I read them, the rules are less clear on what content PROVIDERS can do with their own content. And Verizon just bought (primarily) a bunch of content.
I can't charge extra to carry certain content? Fine. Now I buy the content, and change how it's delivered. I have "Huffington Post Free Edition," with limitations on speed, multi-media content, etc. Then, as an EXCLUSIVE offer to Verizon customers, I have "Huffington Post Express," which is the full site delivered at an actually useful speed. If Time Warner Cable wants to get the "real" Huffington Post (i.e. the "Express" edition) delivered to their customers, they have to license it.
Hey, presto! A world where the network providers actually CAN charge to deliver content preferentially. All it needs is for them to own the content in the first place.
I predict we'll see a lot more of these vertical mergers of content providers and networks, and there will be an increasing wave of "subscribers only" offers in the near future.
I can not understand the leadership at Verizon. They seem to always do the opposite of what they should do.
For example, when the iPhone first came out, Verizon turned Apple down and lost quite a few subscribers to ATT. I wonder if the executive that made that decision kept his job?
More examples:
Red Box deal
Intel TV assets
and now AOL
There never appears to be a coherent thought process. The layoff thousands 3 weeks ago, going to lay off a lot more on May 22nd, yet there is money to waste on AOL. Funny thing is, I will probably be laid off after this year's contract negotiations are over, but my son will start working for Vz in June.
I bet they bag Wireline with the load debt so that Wireless books look great.
Maryland State Motto: If you can dream it, we can tax it.
At the time that was happening everybody was like "wait, Time Warner has publishing, TV, print media, movies, and AOL has ... email?".
At the time, I was thinking AOL only thinks of the Internet as "content" rather than a global interconnected network. And it's become even more true today to the average consumer. Buying a content company is a lot more logical than you would think - but they were a bit early, considering they had dial-up to work with.
I was an employee at the time and you partially hit the nail on the head there.
Steve Case was by far the best CEO I've ever worked under. Both naturally charismatic and a strong long term vision. As far back as the Q-Link days he never wanted to be a service provider or a technology company. He wanted to create a new medium for people to get their content and us buying TW was supposed to be the realization of that idea.
Unfortunately Steve had no idea what he was getting into going up against the entrenched old media execs and his allowing them to retain some control was AOL's undoing.
At the time of the purchase teams at AOL had developed working POCs for streaming music and video delivery that worked with minimal buffering at 19.2k while retaining good quality (of course that was before HD took off). What Apple did with the iTunes store we had done long before. All we needed was the keys to the TW media kingdom and the digital media landscape would have looked a lot different. We all know what old-media thinks about digital content though...
Steve's last misguided act in the saga was to sacrifice himself to get Ted Turner out, but there was no one that ever replaced Steve's drive and passion and TW took more and more control.
Contrary to gstoddart's uneducated understanding of things, AOL was the only profitable (mostly due to the dialup income) portion of TW after history had been re-written. TW bled the money out and into other money pits until there was nothing left and they finally let AOL go.
AOL always got a bad rap and many of my co-workers were afraid to admit they worked there. It was a good company that filled it's role very well. It was never a service meant for those with technical ability. It was meant for those that barely wanted to know what a computer was and it served them very well. It saddens me still how things turned out and that they've fallen into typical flailing around that many companies seem to do these days when trying to chase short term profits.
Your mom is ultra hipster! Snail mailing an Email is so meta it caused my mustache to uncurl!