Industry analysts took a look at the possibilities that might emerge from the recent acquisition of AOL by Verizon. Jennifer Fritzsche, an analyst from Wells Fargo, predicted that the merger will help Verizon monetize its upcoming OTT video service, which is expected to feature mostly short-form, live content, through AOL’s advertising technology. Moreover, the deal is more evidence of the strategic divergence between AT&T and Verizon, with the former continuing to expand its own physical infrastructure (through its merger with DirecTV), while the latter is moving to a mobile-first program, with advertising playing a large role.
Craig Moffett from MoffettNathanson also praised the acquisition, indicating that Verizon’s move is akin to skating “where the puck is going to be.” He also noted that AOL owns the third largest domestic online video content network (behind Google and Facebook), and a top-five online advertising range. However, other analysts panned the deal, citing a lack of synergy in combining networks and content, while analysts at Macquarie Capital thought Verizon “paid a hefty price of $4.4 billion for what we believe to be an unproven programmatic ad-tech platform in the nascent video ad-tech space.”