Verizon Communications Inc. has approached AOL Inc. about a potential acquisition or joint venture with the Internet company to expand its mobile-video offerings, people with knowledge of the matter said.
The wireless carrier hasn’t made a formal proposal to AOL, and no agreement is imminent, said the people, who asked not to be named because the discussions are private.
Verizon is primarily interested in AOL’s programmatic advertising technology — the automated buying and selling of ads online — which two people said could be paired with a future online-video product. With a takeover it would also gain paying subscribers and Internet properties including the Huffington Post.
Chief Executive Officer Tim Armstrong has used digital-advertising acquisitions to transform AOL from the Internet portal once known for its “You’ve got mail” alerts. Verizon is seeking expertise in three areas: online content, mobile video and advertising, one person said, and a venture — rather than a takeover — would keep it focused in those areas.
“Verizon needs a digital response and AOL has shown the best strategic foresight of navigating the digital-video world,” said Laura Martin, a senior analyst at Needham & Co. “Verizon can buy or build that, but it’s unlikely to build it fast enough.”
The company also has held talks with several of AOL’s peers about how to bolster those businesses, one person said.
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