The Republican of Springfield (Mass.), May 13:
“You’ve got voicemail.”
Verizon is planning to purchase AOL for some $4.4 billion. One can well imagine that there were plenty of folks at both companies mimicking the voice of America Online’s “You’ve got mail” announcement that was, for a time back in the go-go ”˜90s, virtually synonymous with the brave new world of the Internet.
And then AOL bought Time Warner, the new gobbling up the old, and the dot-com revolution was complete. Or so it seemed for a moment. Until the tech stock bubble burst and that failed mega-deal began to be taught in business schools as one of the worst mergers ever.
Telecom giant Verizon is scooping up AOL for the latter’s video capabilities. Verizon wants to reach the growing number of so-called cord cutters, people who don’t subscribe to cable or satellite TV bundles, but who would rather watch video on their smartphones and tablets.
Federal regulators, of course, will have to take a look at the deal. With AOL making its living as a content provider and Verizon in the delivery game, some scrutiny is warranted.
Unlike AOL’s acquisition of Time Warner a decade and a half ago, this deal is in no way a hookup of old and new. It’s the union of one rapidly evolving company with another rapidly evolving company. Verizon, of course, was created by destruction, coming into being after the breakup of what was once known to many as “the phone company.” Verizon evolved from the creation of the “baby Bells” that came from the breakup of AT&T in 1984.
For its part, AOL, the former America Online, was for so many people their introduction to the Internet. It was an Internet service provider before folks had even really come to know the term. (Surprisingly, AOL to this day has a bit more than 2 million dial-up customers.) But it has morphed with the times. AOL owns the popular Huffington Post and TechCrunch.
In the 1990s, the Internet was the future. Today, it still is, of course, but it’s just that it looks nothing like what folks had envisioned. Verizon is looking to 2030 as much as to tomorrow. Watch for more deals ahead.
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