Verizon Communications announced a $4.4 billion deal Tuesday to acquire dial-up pioneer turned media company AOL at $50 a share.
The telecoms giant framed the deal as an opportunity to expand streaming video services over its wireless networks. AOL combines a video-rich suite of news sites, which include The Huffington Post, TechCrunch, and Engadget, with streaming technology that delivers high quality video over the web.
“At Verizon, we’ve been strategically investing in emerging technology, including Verizon Digital Media Services and OTT [over-the-top video], that taps into the market shift to digital content and advertising,” Verizon CEO Lowell McAdam said in a statement. “AOL’s advertising model aligns with this approach, and the advertising platform provides a key tool for us to develop future revenue streams.”
AOL shares climbed by nearly 19% in pre-market trading Tuesday.