AOL at centre of fresh M&A move

EXACTLY 15 years after one of the most disastrous mergers in corporate history, AOL is at the centre of a fresh partnership.

The firm, which used to be called america Online and has reinvented itself as provider of online content such as videos and the Huffington Post website, has been bought by mobile phone firm Verizon Communications in a $4.4bn (£2.8bn) deal. The amount is a shadow of the $160bn AOL paid for Time Warner at the height of the dotcom bubble in 2000. Then its business was mainly focused on dial-up internet, games, music and email.

AOL was spun off from Time Warner in 2009 at a value of about $3.4bn.

now AOL has carved a niche as a provider of videos and content used on mobile phones around which it sells advertising worth some $600m.

america’s telecoms giants need to diversify into new fast-growing areas as more users choose to watch news and movies on their mobile phones. Verizon, in which Britain’s Vodafone used to own a large stake, plans to launch its own digital and video platform.

its offer of $50-per-share represents an increase of 17.4pc to the closing price for AOL on Monday.

AOL chief executive Tim armstrong, pictured, will continue to lead the company and predicts mobile will account for 80pc of media consumption in the next few years.

Verizon has more than 100m mobile customers. lowell Mcadam, Verizon chairman and chief executive, said: ‘This acquisition supports our strategy to provide… for consumers, creators and advertisers to deliver a premium customer experience.’ He also claimed that AOL in its latest guise has ‘once again become a digital trailblazer, and we are excited at the prospect of charting a new course together in the digitally connected world’.