
Verizon to Buy AOL for $4.4B - morkfromork
http://www.wsj.com/articles/verizon-to-buy-aol-for-4-4-billion-1431428458
======
WDCDev
To give you some perspective.

When Time Warner and AOL merged back in 1999, AOL was valued at $166 Billion.

~~~
ra1n85
Recently, a woman that I shared an elevator with commented on my laptop - she
noticed that I worked at a large tech company. She commented that she too had
worked for a large tech company at one time - AOL. I smiled.

She then immediately recounted the day she and her entire floor were laid off
unceremoniously. Luckily, that was about the time that we reached her floor.

~~~
fallous
I too worked for AOL at one time, after they bought Netscape who happened to
be my employer at the time. I very quickly took a severance option they were
offering. There were also plenty of developers that fell under the iPlanet
umbrella working for Sun/Netscape that later felt the axe.

Don't think that everyone who worked at AOL were a bunch of "you've got mail!"
chatroom admins.

~~~
toxican
>Don't think that everyone who worked at AOL were a bunch of "you've got
mail!" chatroom admins.

Who in this community would think that??

------
randomname2
AOL in a big media deal, Clinton running for office, stocks at all time highs.
What's not to love about 2000.

~~~
uptown
Plagiarism still going strong too!

[https://twitter.com/ollieblog/status/598087576675844096](https://twitter.com/ollieblog/status/598087576675844096)

------
lxchase
While many are seeing this as bizarre, it is not. This is a programmatic and
verticalization play. Verizon has been investing in adtech companies and
provides the means of distribution. The deal allows them to now own the
content as well. As someone in the advertising agency, Verizon has been one of
the few telecoms that have enabled advertisers to utilize their data. This
deal furthers their ability to tie mobile data with content for targeting and
reporting purposes. You also have to remember Verizon is a TV content
distributor that may pave way to AOL content distribution and allow true ROI
measurement on Linear TV.

~~~
tw04
It's not the least bit bizarre, but it is EXACTLY what people are (or should
be) afraid of. The people who own the pipes should NOT own the content, or
they will be incentivized to leverage their monopoly on our computer screens
to provide unfair advantages to their content.

The FCC should have drawn a line in the sand and been done with it before the
Comcast deal was allowed to go through (but of course the head of the FCC at
that time mysteriously took a cushy job at Comcast after completing her
tenure). You want to own the pipes, that's all you own.

~~~
pyvpx
if so, then why should the pipes be privatized at all? in that case, the pipes
should be built out and maintained at a governmental-level and leased back at
a uniform/standardized price to all providers.

~~~
allendoerfer
Because, you want the pipes to grow.

~~~
sliverstorm
I wonder if that really matters all that much. It could be my limited
perspective talking, but fiber seems pretty future-proof. Nothing is faster
than light; the only conceivable improvement would be cables that can handle
wider spectrum of light.

(The nodes on the other hand, of course, are continually improving)

Ethernet cable is a similar story. NICs have advanced tremendously, but Cat5
(defined in 1991) is still usually all you need.

~~~
nly
Fiber is future proof but most people don't have it. The process of getting it
is called growth. If it's the case that making the "pipes" a public utility
would have hindered growth, then you would never have got fiber.

And 100M ethernet over Cat5e is pretty useless. Standard WiFi these days is
150-300 Mbps. I regret not running Cat6 in to my extension just to be safe.

~~~
sliverstorm
I would run Cat6a if I was building a house, because it's the latest spec and
not much more expensive, but Cat5e is still great. Standard WiFi never gets
anywhere close to those speeds, is simplex, and I find a 10Mbps Ethernet
(powerline) link handily outperforms a 100Mbps WiFi connection for networked
file system access. (Probably either an issue with the simplex or dropped
packets)

P.S. Cat5e can still do 1Gbps, just not over quite as great a distance as
Cat6. Although Cat5e definitely isn't rated for 10Gbps (nor is vanilla Cat6
for that matter)

------
huskyr
For those who are wondering why this might be a good investment: AOL still has
2 million (!) dialup subscribers that fork over $20 a month.

[http://qz.com/401567/more-than-2-million-american-homes-
are-...](http://qz.com/401567/more-than-2-million-american-homes-are-stuck-in-
the-90s-with-aol-dialup-internet/)

~~~
jenius
I feel like this is a perfect reason why this is a bad investment. Anyone who
is still subscribed to AOL dialup is honestly probably a senior citizen or
technology-illiterate. AOL is not even marketing their dialup service anymore.
These people over time will slowly decline until those 2 million eventually
hit zero. In fact, you can clearly see the nearly exponential downward trend
right on the article you linked. This makes it a nice amount of basically free
money for AOL currently, but an absolutely terrible investment for the future.

~~~
andyjohnson0
A significant number of AOL dialup customers are living in rural areas where
broadband is just not available [1].

[1] [http://www.psmag.com/nature-and-technology/neighbors-
still-u...](http://www.psmag.com/nature-and-technology/neighbors-still-use-
dial-internet-88957)

~~~
DrJokepu
With 4G broadband this is going to become irrelevant very quickly.

~~~
ams6110
4G is generally available in rural areas?

~~~
ascagnel_
Yes; Verizon has an offering designed explicitly for rural areas[1], but it's
expensive. The linked article is from 2012, and prices have since declined,
but the general gist of the service is the same: a big antenna you bolt to
your house or a tree and will pull from an existing account-level share plan
(if you have one).

[1] [http://www.cnet.com/news/verizons-homefusion-now-
brings-4g-l...](http://www.cnet.com/news/verizons-homefusion-now-
brings-4g-lte-home-but-not-for-cheap/)

~~~
ams6110
You still have to be in a 4G coverage zone. I guess we're getting into the
definition of "rural." Where I live I have no coverage from any carrier.

~~~
protomyth
People will have better luck with rural telephone companies trying to stay
alive then big wireless carriers. Sprint and T-Mobile absolutely suck in
coverage area for rural folks.

One example, Steele ND and the surrounding area is served by a small rural
telephone company that is laying a lot of fibre (I'm hoping they head North).
A 200M plan (no cap) for $45 a month. This is being repeated quite a lot in
rural areas with rural cooperatives.

------
jmhuret
$4.4 Billion is the equivalent of 7.3 Trillion free hours of AOL service via
promotional cd-rom.

~~~
temuze
Assuming you get 1000 hours per CD, you're saying CDs cost about $1.65.

You could probably get CDs in bulk for an order of magnitude or two cheaper.
Assuming the CDs are $0.01, that's 440 trillion free hours. Great deal for
Verizon.

~~~
jerf
On the other hand, with dial up at ~50kb/s, and the top-end Verizon FiOS
running at 150Mb/s, that 440 trillion free hours of dialup is only 146 billion
hours of FiOS, or $33/hour of FiOS 150Mb/s, or, put in the way that the market
usually charges for bandwidth, approx $24,000/month for 150Mb/s bandwidth.
That is _way_ more than the going rate for that sort of bandwidth.

------
r721
Unpaywalled: [https://archive.is/kVlwE](https://archive.is/kVlwE)

------
mooredinty
For the past couple of years, AOL has been a place where companies go to die.
Will Verizon pick up that mantel and continue offering the much needed "Death
with Dignity" service for waning tech companies?

~~~
itsbits
I am working in AdapTV. With AOL, we didn't die but surely didn't improve...

~~~
vpeters25
I took a contract at this great place with highly experienced team members
which had been acquired by Verizon a year before. I was assured Verizon would
not mess with the great thing they had going but slowly, almost all of them
got fed up with the changes and left, including our manager.

It was not just our team, almost every week there would be a "bye and thanks
for all the fish" email from some higher up.

Just last week was talking to a recruiter who told me of massive layoffs on
that place last year.

~~~
itsbits
Thats lil bit worrying case..But unless Verizon wants to kill of Video Ad
Management Product "ONE by AOL", this may not happen here. AFAIK Verizon
doesn't have anything related on this..

------
hackuser
Is Verizon competing with Comcast, who bought its own media company (NBC
Universal)? Are the big communications companies now competing over vertical
integration?

If they invest in vertical integration, that might give them a strong
incentive to maximize their investments by priortizing their own media over
others, degrading the open Internet.

~~~
snowwrestler
The answers are yes, yes, and yes.

As content becomes unbundled from the wire, wire-owning companies need to
become content companies if they want to avoid becoming a utility.

------
darklajid
Today I learned that WhatsApp is 5 times more valuable than AOL - and I never
understood either of these companies' market..

Interesting though - that company 'felt' like a giant when I seriously got
into using the web and although the article seems to imply that the operations
of AOL continue (using the AOL brand?) it's fascinating to see such a company
being swallowed.

~~~
aylons
Sorry, but why do you believe WhatsApp is overvalued? They have an incredible
mindshare, it is the only app (besides Facebook), that I see moms and grandmas
using on a daily basis.

Heck, my mom talk to me mostly through it. She evens send me emoticons,
pictures and voice notes!

~~~
epmatsw
I've never seen a person in the US actually use WhatsApp to talk to another
person in the US. I used to occasionally see someone use it to talk to friends
who were traveling abroad, but that's mostly been replaced by iMessage or
Hangouts at this point.

~~~
binxbolling
I've paid for WhatsApp and am in the US. Yes, I originally joined to chat with
people overseas, but now it's also the sole messaging service I use with
multiple US-based contacts.

AMA I guess, since apparently fellow Americans don't understand WhatsApp.

~~~
nullrouted
Ya I never really used WhatsApp but I do use Telegram for my friends (US). Why
Telegram over WhatsApp or Kik or whatever? Desktop client, it is nice to be
able to reply without pulling out my phone at work.

~~~
nly
Well, there's Whatsapp Web, but it oddly requires you keep your phone
connected.

------
aioprisan
The internal memo: [http://techcrunch.com/2015/05/12/verizon-
aol-4-4b/](http://techcrunch.com/2015/05/12/verizon-aol-4-4b/)

------
Dirlewanger
Time to discard every media entity under AOL. You can be damned sure Verizon
will be tightening up how wild they get on certain issues e.g. Net Neutrality
and anything else that can affect their bottom lines.

------
baldfat
Huffington Post, TechCrunch and Engadget how do these fit? Does this mean
these might go away??????

Can one be so lucky?

~~~
randomname2
Now that the FCC is involved with internet regulation, why do away with them?
Verizon can use them to put out talking points and keep competitors out by
getting favorable regulation passed.

------
nashashmi
I am having an epiphany. AOL, an internet provider and ad company, buys Time
Warner. AOL gets spun off into an independent company. AOL reinvents itself as
a media and ad company. Verizon, an internet and TV provider, buys AOL.

This is happening after Verizon reinvented itself from a phone company. Merger
2.0 is making more sense than it was the first time, but still, nonsense
enough.

------
kreilly
This is not about dial-up or media. This is about ad tech. Aol is done a very
nice job of acquiring sold assets in this space. I think this is a smart move.

------
acomjean
I used to use AOL. Before broadband to the home, AOL had lots of modems and
local access numbers. I traveled a fair bit and that was really useful, for my
monthly alotment of 3 hours.... This was a while ago (AOL was giving away
floppy disk before CDs.)

It was a walled garden, and since most people were on AOL, besides email there
wasn't much outside communicating. Frankly at the time there wasn't nearly as
much on the web. When AOL unleashed their users on the web it was a big deal.

AOL really got killed by broadband to the home, which they couldn't offer.

I hope that this doesn't turn into a onerous add push at Fios and DSL users.
Verizon does some strange things like redirecting missed DNS hits to an ad
page.

------
yla92
Official announcement : [http://www.verizon.com/about/news/verizon-acquire-
aol](http://www.verizon.com/about/news/verizon-acquire-aol)

------
tat45
Another former AOLer here. They tried to make a run at the broadband market in
the early aughts by partnering with various telcos (I know; I was part of the
team that built the back-end interface with the ISPs), but it was too little,
too late. I never understood how AOL thought that would be sustainable in the
long term.

A few months after I left the entire billing department saw deep cuts after
AOL nixed their monthly subscription fees for dial-up.

~~~
yuhong
Makes me wonder what would have happened if this acquisition was done a decade
ago.

------
brayton
Surprised we aren't seeing the Gov jump in with Antitrust laws. Verizon can't
have 4G AND dialup! Just not fair

------
tomswartz07
This might be a good investment: AOL still has over 2 million dialup
subscribers.

It's not unreasonable for a company that 'owns' the copper going to homes to
also manage the dialup internet connections there as well.

------
Aqwis
Is AOL still an Internet access provider?

~~~
acjohnson55
Yes, there's a shrinking, but still very lucrative, dialup business. It's
provided the capital for Aol's growth into media and advertising these past
several years.

~~~
raverbashing
Gotta love old people adverse to change, or thinking they still need to pay
for email.

~~~
tat45
Not to mention those people who live in areas still not serviced by any
broadband providers. I know, insane, right? I thought _everyone_ lived in
cities too!

~~~
raverbashing
You can usually get an Edge/2G connection, which is probably faster than dial-
up.

~~~
plorkyeran
In practice it isn't signficantly. EDGE peaks at 384Kbps, but these days if
EDGE is the only thing available you generally have a poor connection that
gets you about half that _before_ all the dropped packets that halve it again.

------
randomname2
As a reminder, AOL bought Time Warner for $180 billion 15 years ago.

------
ck2
With what I know about both companies, they are practically made for each
other.

Verizon needs a gullible user base and anyone still using AOL basically is
purely gullible.

BTW how does Verizon get away with breaking the law every single day: when
they were licensed 700mhz by the US Government (on behalf of the US people)
for LTE they were required to not restrict user devices on that band. Go try
bringing your own non-verizon LTE device to verizon and see what they say (the
answer is always no)

------
gcb0
here's the armchair analysis:

AOL was valued at 160+b at it's peak. and it was making lots of money as a
"media" company to the point they thought the right thing was to buy Warner.

then they lost the captivity of their dial up clients, and their media
business vanished overnight.

Verizon realized they own the pipes and they want aol know how on how to
capitalize it to profit from media while it has the audience captivated.

people are finally realizing that having control over the pipes give you
control over the content. AOL realized that too late. expect Verizon to fight
very hard on net neutrality to be able to monetize their hard earned eye
balls. and welcome a new era of mobile bloatware and deals like you already
see in south america, where you can get a 100mb data plan only, but traffic to
face book and whatsup is free.

------
cityzen
so what happens to the digital prophet??

~~~
soylentcola
I think Shingy will replace the "can you hear me now?" guy.

~~~
astrodust
Their "get your HoMo on" campaign will implode for sure.

------
dheera
Anyone else read it as "Verizon to buy AOL for $4.48"?

~~~
orthecreedence
That would be ridiculously overpriced.

------
peter303
I wonder if that makes Ariana Huffington richer than her ex-husband. Mike H.:
scion of wealthy Texas oil family. Former California representative, failed
run for Senate using family money. Came out as gay man after loss and now is
an indie film producer. Ariana H.: colorful journalist and political analyst
retaining native Greek accent. While married she was a conservative, but
became flaming liberal after divorce. Started dot.com news site, sort of the
mirror image of conservative Matt Drudge. AOL bought her out a few years ago
and she is a significant stock holder.

~~~
selimthegrim
Maybe she'll actually get around to paying all her bills in Santa Barbara this
time.

------
inthewoods
An AOL/Yahoo combo has been widely discussed on the web - I guess that is one
less possibly for Yahoo (unless Verizon wants to buy that too.)

------
EGreg
AOL merged with Time Warner and now Verizon buys it. How times change.

Still I am concerned about all the consilidstion in the telecom industry...

------
chiph
While I don't doubt that Verizon will be able to convert some of those AOL
subscribers to faster broadband service, I suspect a lot of them either can't
upgrade, or won't upgrade. The dial-up subscribers are mostly a cash cow
($180/yr each, about 12 years to recoup the investment) and everyone is
talking about them, but I wonder if there are other AOL properties that
Verizon also values that can help justify the premium they paid.

------
hackuser
As people tell their AOL stories, note the other front page post today that
Mozilla has released Firefox 38.

Thank you AOL!

------
skazka16
AOL stock price is now almost 30% more comparing to previous week. Not a bad
move from shareholders.

------
mgarfias
Shoulda held onto the pitiful amount of stock they gave us.

------
Achshar
Considering how irrelevant AOL itself has been to the mainstream internet for
some time now that price tag seems awfully high. They do own a bunch of
popular bligs/websites though. So maybe that's it.

~~~
itsbits
You obviously unaware of Video Ad Management tools they offer...

------
hownottowrite
So I guess CompuServe is back in one piece again...

------
tonetheman
That is more than 4K distressed babies.

------
TodPunk
Funny that WhatsApp is somehow WAY more valuable than AOL is. I feel old.

~~~
exacube
Whatsapp is worth 19B to Facebook, not to the rest of the industry.

------
dec0dedab0de
Would that make AOL the first company to provide Fiber and Cable?

~~~
baldfat
Cable I didn't know AOL had ever made it into cable. Or are you meaning dial
up over telephone cable?

~~~
sswaner
I think he is referring to Verizon. Now that they are part of the Verizon
family AOL can get you online via, fiber, cable or dialup.

~~~
dec0dedab0de
Actually, I didn't realize AOL and Time Warner split.

~~~
briandh
Not only did AOL and Time Warner split, but Time Warner Cable is a separate
company from Time Warner.

