AOL Deal Will Help Verizon’s Mobile Advertising Push

Over the past two decades, AOL Inc. has undergone some massive changes. What was once a portal for dial-up internet access, AOL suffered under the merger with Time Warner. After starting over again six years ago, AOL managed to increase its value by acquiring relevant sites like Huffington Post and Tech Crunch. Perhaps most importantly though, AOL took a dive into the deep end of the mobile advertising pool – and it looks like their gamble will pay off.

Last Wednesday, Verizon Communications Inc. announced that the company will be acquiring AOL Inc. in a $4.4 billion deal.

With the latest trends predicting a greater shift toward mobile use by consumers, many corporations have been seeking to carve out a piece of the market share. Currently, the mobile market lies directly in the hands of two leading companies, Google and Facebook. Facebook Inc., of course, owns and operates the largest recurring mobile app user base, while Google provides several integrated apps like Drive and Maps, while providing  the most popular search engine for users as well. As a result of their products’ frequent use, these juggernauts have had the mobile advertising market in a virtual stranglehold.

All of this, however, is poised for a change.

By acquiring AOL, Verizon has the opportunity to integrate advertising and content programming with one of the most ubiquitous wireless networks in the world. The assets provided by AOL include several websites with marketable content, but most importantly, Verizon will receive a mobile video-streaming service out of the deal. As consumers continue to shift away from paying for traditional TV bundling packages and move toward mobile video-streaming services, Verizon wants to provide such a service to new and existing users.

With the overcrowded wireless market in the United States, Verizon is looking to offer even more to customers to get them on board. While they have been searching for opportunities to increase their brand saturation over rivals like T-mobile and AT&T, they have concurrently been developing their video-technology wing by acquiring other tech companies like upLink, EdgeCast and OnCue. Unfortunately, their original plans for a mobile video-streaming service lacked an advertising component.

Now, with the acquisition of AOL Inc., Verizon has the opportunity to create a brand-new revenue stream for the company, for the first time ever. Verizon has been known for years for having excellent data streaming and calling services, and they have generated an enormous amount of brand awareness in that time. The next step in their business’ evolution involves the creation of a mobile-integrated advertising platform that they can use exclusively on their mobile video-streaming service. The plan is simple with potential for success, but one cannot imagine Google Inc. sitting idly by as Verizon takes a bite out of their market share.

Only time will tell. Expect to see Verizon’s new streaming service in late June of this year.