Two Great Companies Collide

I don’t think that I would ever categorize myself as an impulse buyer – I generally mull over my bigger purchases for a good while before I’m ready to fork out the cash. I mean let’s be honest, open wallet surgery is probably the most painful for all of us. Well not for all of us…Verizon decided to splurge on a $4.4 billion dollar purchase. Yes, they recently announced and plans to follow through with this huge purchase of Internet giant AOL this summer. I’m sure you’re wondering what the logic was behind this huge endeavor and as stated by the chairman and CEO Lowell McAdam, the merger is vital to Verizon’s future efforts on the advertising front.

Surprisingly, the teams are not changing much and the AOL executive team is staying exactly the same. I can’t say whether or not this will lead to success but I definitely don’t see this as a proper merger unless the two companies truly do “merge”. I’m sure everyone remembers the last time AOL merged with a large company and what a success that was. But surprisingly that didn’t deter neither AOL nor Verizon – the great optimism is refreshing.

BUT before everyone starts the wave lets turn to Wall Street for their analysis of the situation. It has been reported that even though the merger has happened Wall Street is yet to be convinced and hasn’t budged on stock value for the “new” company. Naturally, Wall Street is the go-to when it comes to assessing new business ventures and whether or not they will have hope of being successful – at least it is for me. I can’t help but feel some skepticism because of this lack of support by Wall Street for this merger but I guess time will tell.

Not everyone is happy about this merger and there are some pretty good reasons why. One of the biggest issues that is spurring debate is the fact that if Verizon turns its attention to these new ventures its main function as a service provider for many individuals and businesses will suffer. I can see why this would be of concern to all the people that Verizon services and who honestly probably don’t care what new ventures Verizon is trying to explore through this merger with AOL.
Another skeptic is the Huffington Post which is owned by AOL, amongst two other major content-driven websites, TechCrunch and Engadget. Some speculation on the situation has brought up the possibility of it being in Verizon’s better interest to simply get rid of them. Why would Verizon ever want to get rid of these websites that hold so much value you ask? Well, simply put, Verizon has made this huge acquisition in order to spur growth and innovation in its streaming and mobile video capabilities. They really could care less about the content that is pushed out through these major channels run by AOL. I really hope these websites aren’t given the shove because the Huffington Post is always one of my go-to places when I want to get up-to-date with everything that’s going on in the tech world especially.

All in all, the merger is happening no matter what and only time will tell whether or not it was ultimately a good idea. As for the fate of our favorite AOL publications, that rests at the hands of Verizon and all we can do is patiently wait.