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Verizon’s AOL Acquisition: The Real Deal

Many theories have been circulating in the wake of Verizon’s recent industry-rattling acquisition of AOL. Reactions were diverse. On one side of the approval scale, social networks fluttered with excitement over new content opportunities for Verizon. On the other, some industry analysts thought the wireless giant foolish for over-investing in an outdated and declining content platform. Whether for or against, both sides had one thing in common: they missed the point entirely.

Don’t get me wrong. Verizon is certain to leverage AOL’s substantial content arsenal to their advantage. But that’s not the primary reason they spent over $4 billion on the company that once brought us free Internet trials via neatly packaged CD-ROMs. The truth is, this acquisition has nothing to do with content, and everything to do with advertising technologies (adtech).

The Ad Tech Platform

AOL CEO Tim Armstrong was quoted by Adage as saying, “I don’t see us as a content company,” and, in fact, it seems that AOL has been strategically building their adtech portfolio in anticipation of a deal exactly like this one.  Since 2010, AOL has acquired three key ad tech companies, each critical to their current position in the ad tech space. Starting with the acquisition of Studio Now, a video creation platform, and wrapping with the purchase of, AOL has assembled a powerful platform that can create, distribute, and most importantly monetize digital and video content across channels. Christopher Mims of the Wall Street Journal summarizes, “AOL’s talent at monetizing video is built on the backs of a handful of acquisitions that now look particularly prescient.” This proprietary ad tech platform is the coveted golden goose that drew Verizon to the table.

Finding The Customer in Verizon’s Acquisition of AOL

The Customer Journey

With their newly acquired adtech platform in hand, Verizon can fully reap the value of the incredible amounts of deep and proprietary consumer data they’ve owned for decades.  This union allows Verizon to create a timely, relevant, and personal journey for their customers – regardless of channel, platform, or device.  Using digital tools to transform the way Verizon communicates, advertises, and engages is what we at Wipro Digital call “user-centered design.” It’s what Verizon aimed for as they pursued this acquisition and where Wipro merges insight, interaction and integration: in experiences that bring businesses closer to their customers.

Ultimately, Verizon understood what they needed to leverage their intimate knowledge of customer needs, wants, and desires in a way that put each customer at the center of every idea, decision, and action.

This acquisition tangibly defines the value of customer-centered strategy and action. Netflix has long been heralded as the shining example of interactions in an entirely intuitive way across platforms. In this landmark deal, Verizon just paid AOL $4 billion for the tools to create a similar (and potentially more powerful) customer experience.

What have you done to craft your customer-centered strategy?

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