May 14, 2015

AOL acquisition helps position Verizon in tech market

On this blog, we recently discussed Verizon's intent to purchase web giant AOL. As an East Coast-based telecommunications corporation, Verizon doesn't naturally compete with companies like Facebook and Google, but some experts say that its latest purchase may position Verizon to rival those industry leaders in the increasingly heated area of web advertising. 

"At first glance, the New York-based telecommunications firm may seem like an unlikely competitor to the Silicon Valley behemoths [Google and Facebook]," writes Rakesh Sharma of The Street. "But now as Verizon plans to absorb AOL, the company becomes their rival, product of a fast-changing business environment driven by technology."

Sharma credits AOL's status as a content platform and distributor as its most valuable asset to Verizon.  Its focus on creative energy, as demonstrated in its purchase of The Huffington Post, and delivering media to consumers, AOL can diversify Verizon's business model beyond mobile technology and cellular service.

Google recently partnered with Sprint and T-Mobile, a sign that the line is ever being blurred between web communications and telecommunications. As app startups and major players like Facebook enhance their messaging offerings to include voice and video communications, they may have the clout to redraw the marketplace. As a result, Verizon's acquisition of AOL helps establish its reach to consumers to promote other products and services in development. 

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