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Verizon buying AOL for US$4.4B

Published:Wednesday | May 13, 2015 | 5:00 AM
This May 12, 2008 file photo shows the AOL Running Man logo and other decorations at AOL's New York offices. Verizon on Tuesday, May 12, 2015 announced it is buying AOL for about US$4.4 billion, advancing the telecom's push in both mobile and advertising fields. (AP Photo/Mark Lennihan, File)

Verizon is buying AOL for about US$4.4 billion, advancing the telecom's push in both mobile and advertising fields.

The acquisition gives Verizon an entryway into the increasingly competitive online video space. The New York company is the country's largest wireless carrier as well as an Internet and TV provider, and it is increasingly over the wireless space that telecom companies are fighting to win customers through video content.

Last month, Verizon said it was preparing to launch a video service over the summer targeting mobile devices and it is establishing partners to deliver that content. It also recently began offering tiered cable bundles, putting it at odds with major content companies like ESPN, as it sees more customers cut the cord in favour of streaming video.

Verizon Communications Inc will pay US$50 in cash for each share of AOL Inc, also based in New York, a 15 per cent premium to its closing price on Monday.

"Verizon's vision is to provide customers with a premium digital experience based on a global multi-screen network platform," said chairman and CEO Lowell McAdam in a printed statement.

The deal is expected to close this summer and Tim Armstrong, AOL chairman and CEO, will continue to lead that company.

AOL HISTORY:
— 1985: Company is founded as Quantum Computer Services and offers an online service named Q-Link.
— 1989: Quantum launches instant messenger service that greets users with the saying ‘You've got mail!’
— 1991: The company is renamed America Online through an employee contest.
— 1992: America Online, commonly called AOL, goes public on the NASDAQ exchange.
— 1993: AOL starts sending disks to thousands of households to connect them to the Internet.
— 1995: AOL's service reaches 1 million members, the company debuts its AOL.com homepage and expands internationally.
— 1996: AOL hits 5 million members and launches the Buddy List for chatting.
— 2000: AOL's market value reaches about US$164 billion near the height of the dot-com boom.
— 2001: AOL completes combination with Time Warner Inc. in a deal valued at more than US$160 billion when it was announced the year before.
— 2006: Company officially changes its name to AOL and starts offering its services for free.
— 2009: Time Warner spins off AOL, ending a union widely viewed as one of the worst mergers in history.
— 2011: AOL's market value slips to about US$1.1 billion as its share price falls below US$12. Company purchases The Huffington Post.
— 2014: AOL creates joint venture with investment firm Hale Global to run its troubled local-news business Patch.
— 2015: AOL market value is down to US$3.34 billion.

Sources: AOL.com, SEC filings, FactSet, Associated Press reports