Verizon's AOL Buy Completes Its Content Story

AOL answers the question of how Verizon will monetize all its planned video offers, and it also indicates the carrier is becoming a content provider, whether it calls itself one or not.

Sarah Thomas, Director, Women in Comms

May 12, 2015

3 Min Read
Verizon's AOL Buy Completes Its Content Story

Verizon has insisted in the past that it is not a content provider, but it's becoming increasingly hard to believe -- especially now that we know it lied about its plans to acquire AOL as well.

In fact, everything that Verizon Communications Inc. (NYSE: VZ) has said and done in the past year seems to be leading up to it becoming just that -- a large and powerful content provider. Sure, it will always be a network operator first and foremost, but its $4.4 billion bet on AOL confirms that it sees its future in (monetized) content. (See Verizon's $4.4B AOL Buy a Digital Media Play, Verizon CEO Denies AOL Acquisition Interest and Verizon CEO: We Are Not a Content Company .)

Verizon's EVP and President of Operations John Stratton said on a call with analysts today that the AOL acquisition was "very beautiful complement to the foundation we've been building in digital media services." The carrier has also acquired Edgecast and OnCue to further its video services ambitions, but AOL is its largest video purchase to date. (See Why Did Verizon Buy OnCue?)

The carrier has actually been building out its digital media services strategy since as far back as 2011 with an eye on pushing content to the edge of its network and making it consumable in multiple formats and across multiple networks. A lot of the details around its various offers -- LTE Broadcast, its forthcoming mobile-first video service -- are still vague, but the focus has all been on monetizing its LTE network. (See Verizon Fires Up Digital Media 'Factory', Verizon Crafting OTT Business Models and Verizon Plans Mobile TV Service in 2015.)

And, AOL, with its vast video ad properties, provides the answer to how it monetizes that content, which is increasingly important as smartphone sales reach saturation. (See Verizon Focuses on Cashing In on LTE.)

"We can envision a scenario in which Verizon leverages AOL’s ad tech platform to target consumers and measure their engagement across traditional and digital video and measure and deliver interaction across its multiple devices, platforms and properties," MoffettNathanson analyst Craig Moffett said in a research note. "That would allow for better ad serving, conversion, and ultimately attribution... and they can deliver all that across the largest wireless business in the US."

Want to know more about the wireless market? This will be just one of the many topics covered at Light Reading's second Big Telecom Event on June 9-10 in Chicago. Get yourself registered today or get left behind!

Sprint Corp. (NYSE: S), too, might find itself much more involved with content as its owner SoftBank Corp. announced that former Google (Nasdaq: GOOG) executive Nikesh Arora will soon replace CEO Masayoshi Son as president of the Japanese carrier. Arora will be charged with using his Google background to bring a more Internet-focused approach to both Softbank and Sprint. (See SoftBank's Son Names Arora New President and Google Biz Boss Leaves for SoftBank.)

Carriers like Sprint and Verizon don't have the reputation for being innovative, open and content-savvy that Google and even AOL once had. Whether they can get consumers to think of them as anything other than their phone providers remains to be seen, but I don’t think there's any denying that the future of networks is in what you can do with them. Whether it says so or not, Verizon is counting on it.

— Sarah Thomas, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editorial Operations Director, Light Reading

About the Author(s)

Sarah Thomas

Director, Women in Comms

Sarah Thomas's love affair with communications began in 2003 when she bought her first cellphone, a pink RAZR, which she duly "bedazzled" with the help of superglue and her dad.

She joined the editorial staff at Light Reading in 2010 and has been covering mobile technologies ever since. Sarah got her start covering telecom in 2007 at Telephony, later Connected Planet, may it rest in peace. Her non-telecom work experience includes a brief foray into public relations at Fleishman-Hillard (her cussin' upset the clients) and a hodge-podge of internships, including spells at Ingram's (Kansas City's business magazine), American Spa magazine (where she was Chief Hot-Tub Correspondent), and the tweens' quiz bible, QuizFest, in NYC.

As Editorial Operations Director, a role she took on in January 2015, Sarah is responsible for the day-to-day management of the non-news content elements on Light Reading.

Sarah received her Bachelor's in Journalism from the University of Missouri-Columbia. She lives in Chicago with her 3DTV, her iPad and a drawer full of smartphone cords.

Away from the world of telecom journalism, Sarah likes to dabble in monster truck racing, becoming part of Team Bigfoot in 2009.

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