Why Is Verizon Communications Inc. (VZ) Interested In AOL, Inc. (AOL)?

Verizon Communications Inc. (NYSE:VZ) is looking to expand its portfolio beyond the wireless and wireline broadband business. Some reports suggest that Verizon Communications Inc. (NYSE:VZ) is going after AOL, Inc. (NYSE:AOL) for a possible acquisition or a joint venture. Bloomberg’s Mark Barton reported on Bloomberg TV about this acquisition story.

Barton said that Verizon Communications Inc. (NYSE:VZ) has reportedly approached AOL, Inc. (NYSE:AOL) for a potential acquisition or a joint venture. He mentioned that the attempt from Verizon Communications Inc. (NYSE:VZ) is mainly to expand its mobile video offering, according to people who knew details about the matter.

“[…] Verizon has approached AOL about a potential acquisition or joint venture to expand its mobile video offering. That’s according to people with knowledge of the matter. The US wireless provider is primarily interested in AOL’s advertising technology, but it hasn’t made a formal proposal,” Barton reported.

Barton pointed out that the US Wireless provider, Verizon Communications Inc. (NYSE:VZ) is mainly interested in AOL, Inc. (NYSE:AOL)’s programmatic advertising technology, which enables automated online buying and selling of the advertisements.

Both AOL, Inc. (NYSE:AOL) and Verizon Communications Inc. (NYSE:VZ) had a decent 2014, with stock prices not changing a lot throughout the year. Acquisition scenario would mean that Verizon Communications Inc. (NYSE:VZ) would also gain access to internet properties of AOL. A venture would mean that Verizon Communications Inc. (NYSE:VZ) would try to gain expertise in areas like mobile videos, contents and advertising technology.

Will this merger become one of the biggest in 2015? Will it help Verizon Communications Inc. (NYSE:VZ) to broaden its spectrum? We will have to wait and see the developments on this.

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