AOL Gets a Surprise from Verizon

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

AOL Gets a Surprise from Verizon

Did you know that 2.1 million people still use AOL dial-up - and pay about $20 per month for it?

And Verizon just put in a bid to buy AOL for about $4.4B in cash. (No idea where that cash is coming from. VZ has $121 Billion in debt. It just paid the FCC almost $10B for AWS-3 spectrum.)

What will VZ do with the content like Huffington Post and TechCrunch? Some say spin it off for a billion.

Speculation is that VZ just wants to the video and advertising pieces of the business to go with their super-cookies and mobile plans. It is an interesting move. AOL dialup will give it some cash flow. AOL advertising platform will get it some more revenue -- and allow it to compete against Google.

When you sell off wireline and towers and bet everything on mobile, you have to go all in. That means IoT / M2M, Smart Grid, mobile device management, apps/ecosystem, content, advertising (super-cookies). Maybe AOL fills in some of those gaps, plus ads video to the OTT pie that the Duopoly is chasing after.

With a $4.4B price tag, VZ gets back $550M in subscription revenue per year and $984M in AOL properties ad revenue, according to the latest Q1 2015 numbers from AOL. I didn't know that AOL was pushing $624 million in quarterly revenue!!!

This should keep VZ distracted for a coupe of quarters.

Interesting stats from the article

70% of Americans connect to the Internet over broadband. The average U.S. broadband speed is 11.4 Megabits per second.

A 2009 study from the Pew Research Center says 32% of dial-up users said they couldn't afford to upgrade. Most of the rest said broadband either wasn't available -- or they just didn't care to change.

Related Articles to 'AOL Gets a Surprise from Verizon'
Featured Events