Why did Verizon buy AOL for $4.4 Billion? Could AOL have negotiated a better offer from other suitors? Tim Armstrong, AOL chairman and CEO, was on CNBC to answer those questions:
Why did Verizon buy AOL for $4.4 Billion?
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Armstrong: “I think Verizon is a company that is one of the largest companies in the world and one of the most successful, And I think when they were looking forward they were deciding how to actually play the future of media. And AOL over the last five or six years, we have really invested at the front-end of mobile and video and content brands. And I think from the Verizon standpoint, that’s a great company that makes more money, the more things flow through their pipes, more data. We’re going to offer a new layer of service above the Verizon pipes which will be all about media, content, advertising.”
How did AOL make the decision to go with Verizon’s offer? Armstrong: “The reality is the conversation around AOL has been out there, there has been rumors about AOL for a long time and we as a board took a step back and said what is going to take AOL to the next level. We had one sheet of paper that had multiple dimensions on it overall and Verizon basically ticked all of those boxes.”
“Other people were in the process, you saw in the filing we did. So, we got the best deal for our shareholders, the best deal for our team and employees at AOL, the best deal for Verizon. And I think that is probably the most natural deal for the future about mobile.”
