Verizon just got an email from AOL. It played a sound: “You’ve got a white elephant!”
— Brad Warthen (@BradWarthen) May 12, 2015
That was actually my second reaction when I heard Verizon had bought AOL for $4.4 billion. My first was that I didn’t know Verizon was into collecting retro kitsch.
What on Earth does Verizon want with AOL? Here’s what they’re saying:
The company has developed valuable technology for serving mobile video and advertising, and Verizon is billing the deal as a way for it to expand its video offerings. Already a leader in distributing mobile video through its robust national mobile phone network, Verizon is making a push to become a leader in so-called over-the-top video, shorthand for television content distributed through the Internet.
But in acquiring AOL, Verizon is buying much more than websites that host streaming content. Along with its video and online advertising technology, AOL owns The Huffington Post, a sprawling collection of international news websites with growing traffic.
It also manages a dwindling but profitable dial-up Internet business, providing online access for those who live in areas too remote to have broadband, or who never canceled their subscriptions…
Yeah, well, the WSJ is not impressed, saying the “deal suggests a crumbling empire more than it shows the power of the network:”
Neither Verizon nor AT&T is going away. But their place in the world seems ever more insecure. What is their purpose in this converged world? AT&T has taken a path into the past, agreeing to buy satellite-TV operator DirecTV for nearly $50 billion. Verizon is spending $4.4 billion on AOL, a loose confederation of advertising-technology businesses, random “content” plays, and a beguiling, money-leaking adventure called the Huffington Post.
This puts Verizon in a number of intriguing, if conflicted, new positions. It will have to be neutral arbiter in these advertising businesses, but also have to nurture and develop its offerings of online video and content. Does a phone company have the mettle and creativity to do this well? Does the prospect of a TechCrunch video show—brought to you by Verizon—captivate or horrify the average millennial?
The answer is that no one has the answers. It is a war of all against all. Platforms against platforms. Content against content….
Like “Game of Thrones.” And that analysis makes Verizon sound kind of like the Starks at the end of Season 3 (which is where I am).
Does this make sense to anybody? I mean, don’t go by me — I’m the guy who thinks Facebook is the AOL of this century. Think about it — It’s another messy, way-too-busy interface that tries to be your one and only portal to the Web. I find it hugely irritating, and more of an obstacle than a useful tool. But it’s still going strong, so, as I say, don’t go by me…