Tuesday, May 12, 2015

Which Way for AOL Under Verizon?

Verizon’s decision to buy AOL inevitably raises lots of questions about synergy and strategy. Most of the speculation will center on synergies between AOL and Verizon Wireless, especially the role AOL might play in a future Verizon over the top mobile video service.

Some might argue AOL helps Verizon build a branded mobile streaming service, with notable original content supplied, in part, by AOL. In that view, AOL helps Verizon build a branded streaming business.

Others think the advertising platform is what Verizon really requires, as nice as the other potential advantages might be. That might be the more prevalent view if one assumes Verizon really wants to build a streaming capability Verizon can sell to everyone, not just Verizon customers.

The former view sees AOL contributing to a “closed” managed service intertwined with Verizon Wireless. The latter view sees the greater upside in an “open” service available to all, more on the model of Netflix.

It is not yet clear which path will be taken.

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