Today, Verizon announced it is buying AOL for $4.4 billion. At first, people seemed a little confused by the deal. After all, when you think of AOL you likely think of dial-up internet subscriptions and the company's editorial arm, featuring brands like Huffington Post, TechCrunch and Engadget, neither of which seem very interesting to America's largest wireless company.
However, it appears the deal is more likely centered around AOL's ad-tech.
As Alex Kantrowitz writes at Advertising Age:
For a while, everything seemed peachy in the desktop-focused ad-tech world, but then media consumption moved quickly to mobile, where targeting cookies don't work effectively, and the system essentially broke.
Verizon, acquirer of AOL, owns the key to fixing this problem: concrete mobile data which can be used to tie user identity across devices.
"The deal means we will be a division of Verizon and we will oversee AOL's current assets plus additional assets from Verizon that are targeted at the mobile and video media space," Mr. Armstrong said in a memo to employees. "The deal will add scale and it will add a mobile lens to everything we do inside of our content, video and ads strategy."
If Verizon's data integrated into AOL's ad-tech, it could result in the first ad-tech stack which can target across devices with deep accuracy (Facebook is currently developing one, using its login data). This combination could help ad-tech get its groove back, and should be strong enough to give Google (the market leader) and Facebook (up and coming) a run for their money.
The thought of someone giving both Google and Facebook a run for their money in terms of targeted advertising does not fill me with joy (and makes me grateful that I am not a Verizon customer).
I'm (perhaps naturally) more interested in the content side of things, though. It's going to be hugely interesting to see what Verizon does with the editorial brands it is acquiring. Reports point to them being sold off, and I think that's most likely. Verizon doesn't want to be in the content game.
But in the short term, before any decisions are made about the future of HuffPo et al., how does the Verizon takeover impact upon the editorial strategy at those publications? I'd hope not at all, but we will see.