This Is Bigggzzzzzzzzzzz
Telecom giant Verizon announced Tuesday it will be buying AOL for $50 per share, or about $4.4 billion. AOL's stock was up more than 17 percent after the announcement. Verizon's stock was down about 2 percent. The transaction will be completed this summer and will take the form of a tender offer followed by a merger, after which AOL will become a wholly owned subsidiary of Verizon, the announcement said.
Having lived through the debacle of the AOL-Time Warner merger, which ruined both companies and has resulted in a demolished magazine and news business where the mighty edifice of Time Inc. once stood, I personally couldn't care less what happens to AOL. But hey -- it's a chance for some folks on Wall Street to make pixels dance and enrich themselves, so let's all celebrate.
Now comes the obligatory boilerplate about how this merger is Good For Everybody and a Great Leap Forward:
"Verizon's acquisition further drives its LTE wireless video and OTT (over-the-top video) strategy," Verizon said in a statement.
Tim Armstrong, AOL's chairman and CEO, will remain at his position once the deal is finalized."Verizon is a leader in mobile and OTT connected platforms, and the combination of Verizon and AOL creates a unique and scaled mobile and OTT media platform for creators, consumers and advertisers," Armstrong said in the announcement. He also said executing this deal was the next step for the company to continue growing.
Yeah, right. That's why failing, doomed companies like AOL, a relic of the early dial-up days, merge; "survival for a few more years" is more like it. Anyway:
"We turned the company around. We outperformed the S&P 500 for the last five years, and when you look at where we are today and where we're going, we've made AOL as big as it can possibly be in today's landscape, but if you look forward five years, you're going to be in a space where there are going to be massive, global-scale networks, and there's no better partner for us to go forward with than Verizon," Armstrong told CNBC's "Squawk Box."
"In today's landscape." If I worked at AOL, I'd be looking for another job, immediately.