This morning, news broke that Verizon is purchasing AOL. Here’s Peter Kafka:
Earlier this year, AOL CEO Tim Armstrong said there was no truth to reports that he was selling his company to Verizon. It’s a different story now: The telco is buying the Internet publisher and subscription service for $4.4 billion.
Verizon, which will pay $50 a share for AOL, says the deal will help its “wireless video and OTT (over-the-top video) strategy.” Verizon says the transaction should close this summer.
Armstrong, who left the top sales job at Google to run AOL in 2009, will stay on to run the business after the deal closes, Verizon says.
$4.4 billion for video advertising tech seems … bold. Clearly Verizon is trying to generate income in markets beyond the ones it exists in as an ISP.
Honestly, I don’t care to much about this. I’ve been a paying Verizon customer for years, and while all ISPs are creepy, I can deal with Verizon’s shenanigans.
However, what AOL is best know for, at least in our circles, are properties like Autoblog, TUAW, TechCrunch and Engadget. That’s where this purchase gets interesting, and possibly troubling.
I’ve gotten to know several people at these sites over the years, and they are all good people. My concerns aren’t with the people reporting, but with the business situation these properties have been thrusted into with this acquisition.
While it has since shuttered the site, Verizon made headlines last year trying to blur the lines between tech coverage and corporate messaging.
As I wrote then, there’s a clear difference between running ads to pay for content and having news be shaped by a parent organization.
Of course, having corporate ownership isn’t anything new. In his editorial about the purchase, Verge boss Nilay Patel writes:
Full disclosure: I used to work at Engadget, as did many of The Verge’s founders; we left AOL to start this site. I never felt any editorial pressure at AOL, but huge corporate news like this would frequently leave us spinning without real answers for months at a time. And Comcast Ventures is an investor in Vox Media, The Verge’s parent company, but it should be abundantly clear that we have complete editorial independence from that relationship.
However, it’s possible that these blogs don’t end up as part of Verizon’s empire. Here’s Kafka again:
One scenario we’ve heard is that Verizon intends to spin out some or all of its content operations, like HuffPo, with a third partner, perhaps German publisher Axel Springer.
In an interview with Re/code, Armstrong didn’t address that scenario directly, though he seemed to leave the door open. “We’ve spoken to partners about content and scaling,” he said. “Obviously we’ve seen a lot of interest in the content brands we have. So over the course of the summer, stay tuned.”
Kara Swisher reports that the Huffington Post at least may be spun off as part of the deal.
Late today, Tim Armstrong spoke on this very topic:
TechCrunch is not getting sold off. There will be editorial independence. And from a distribution and resource standpoint, it’s probably the most exciting deal we could have done.
The interview this is pulled from is an interesting look at the acquisition, but I’m sure it won’t be the last word on the marriage of Verizon and AOL. This one will be interesting to watch for a while.