Updated 06:49 PM EDT, Fri, Jul 10, 2020

Verizon Announces Intent to Acquire AOL Under $4.4 Billion Deal

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Verizon has announced its intention to acquire AOL on Tuesday, a move seen as significant to its future in digital and video platforms. The deal is reported at an approximate price of $4.4 billion, considering purchase of $50 per share.

The merging of the two companies is expected to create a "scaled, mobile-first platform offering" targeted at the billion-dollar advertising industry.

Simply put, Verizon will be able to get two of AOL's technologies, Bloomberg reported. These include exclusive videos and the ability to send targeted ads to mobile devices automatically.

AOL's shares eventually soared 19% to $50.52 at 4:22 p.m. in New York, Bloomberg noted. Verizon, on the other hand, dropped 0.4% to $49.62.

Verizon chairman and CEO Lowell McAdam said, "Verizon's vision is to provide customers with a premium digital experience based on a global multiscreen network platform."

"This acquisition supports our strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium customer experience," he added.

After closing, AOL chairman and CEO Tim Armstrong will continue leading the company, The Huffington Post reported. The outlet took note of his remarks, which said, "The leadership at AOL is staying and I am staying -- enthusiastically, and we made that part of the deal."

According to Armstrong, Verizon and AOL know each other's team very well, and that their cultures share "very similar values." He expressed that AOL will remain seated at its New York headquarters. The company, as it turns out, will operate as a standalone division of Verizon.

At their time of reporting, Forbes cited that Armstrong looks to receive about $200 million for his AOL shares under the deal with Verizon.

Citing information from eMarketer, The New York Times wrote that Google and Facebook are in control of more than 55% of the $42.6 billion worldwide mobile ad market. This is undeniably a huge figure, but when a strong network carrier joins forces with another Internet portal, we may have to observe for possible changes.

Meanwhile, the acquisition also raises questions concerning the future of AOL-run publications, such as The Huffington Post, TechCrunch and Engadget. Mathew Ingram of Fortune is convinced that having a telecom company -- like Verizon -- run publications seems like "a terrible fit."

Ingram argues that it would be difficult to see what Verizon gains from running such publications.

What do you think about Verizon's acquisition of AOL? Did the network giant make the right move? Share your thoughts in the comments section.

Watch CNET's update for more information.

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