MAD Perspectives Blog

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 AOL's Pivot Results in a Match with Verizon

Peggy Dau - Monday, May 18, 2015


The big news last week was Verizon's acquisition of AOL. It's a little bit funny how one of the original Internet stalwarts has been punted around the media and telecom sector. Even as we remember that AOL inspired a movie based on a service that is considered irrelevant by some, many have forgotten that AOL still exists. Since AOL's spin-off from their disastrous merger with Time Warner, it has been focused on content and advertising.

Is there any other way, other than content, to be relevant and influence audience in these days of content everywhere? AOL made the decision to focus on content through acquisitions (TechCrunch, HuffPo), technology (adap.tv, Convertro) and community (20,000 bloggers). They've invested in content development, mobile platforms, video technology. As a result they have reach, influence and...data.

Why is all this interesting for Verizon? Verizon has been an enabler of content delivery to its subscribers for 20+ years. However, they've stepped up their game in recent years through their Digital Media Services group. Their capabilities help customers to prepare and manage video content for delivery to subscribers on broadband, WiFi or wireless networks. They provide the infrastructure that we all take for granted that delivers voice, data and TV services to our devices wherever they may be. But, Verizon doesn't own content. Some of their competitors do (e.g., Comcast, Cablevision). Verizon has the ability to reach it's customers in ways that these competitors cannot - they are a mobile network operator. Mobile is the future. And the future of mobile is content, whether it is informational, entertainment, or advertising.

Moreover, the benefit of mobile is increased volumes of contextual data. Verizon has a view of its subscribers through the data gleaned from subscription plans as well as user behavior while consuming content across TVs, tablets and smartphones. The content and ad technologies that come with the AOL acquisition are complementary to Verizon's Digital Media Services. They provide Verizon with the potential for creating original content, increase advertising revenue through multi-platform ad tech and enhanced data to define further revenue opportunities. The mobile data provides perspective on where and what an individual may be doing as they engage with content and ads on their mobile device. The appeal to brands is evident. Verizon is definitely growing its capabilities beyond being a mere pipe.

While AOL still offers email services, its original business of connecting consumers to the Internet is long dead. In fact, that service was displaced by companies like Verizon. However, AOL was savvy enough, over time, to adapt and pivot. They recognized the value of compelling content and the opportunity to monetize its consumption across multiple channels. As a result they've become highly attractive 

What's your perspective?