Verizon Buys AOL

On May 12th 2015, Verizon announced that it had agreed to buy AOL for the sum of $4.4 billion dollars in cash. The move will allow Verizon to gain access to AOL's content programming and advertising technology. Most analysts believe that Verizon is planning to get into the online video marketplace, while others believe that it wants access to its media entities, The Huffington Post, Techcrunch, and Engadget.

With the rise in the use of hand held and mobile devices, buying AOL will give Verizon more content to offer its phone and internet subscribers. AOL knows more about online advertising than Verizon and this is viewed as the primary reason why it has made the purchase. AOL earned 1.8 billion dollars in ad revenue in 2014. Less than a third of that amount came from serving third party ads.

Verizon also has plans to launch a video service in the summer of 2015. On March 11th 2015, Verizon announced that it had made a deal for programming with DreamWorks Animation's Awesomeness TV Unit. The deal stipulates that Awesomeness will provide Verizon with 200 hours of new shows for the new service. Verizon has yet to mention what the name or the cost of the service will be.