According to a report by Bloomberg News, Verizon has approached AOL about a possible acquisition or joint venture. The carrier is said to be primarily interested in AOL's programmatic ad technology, seeking expertise in online content and mobile video. Verizon is said to be planning a move into online video that would be paired with any resulting venture. A larger acquisition would also allow Verizon to easily convert AOL's dialup customers onto more advanced fiber-optic offerings. In a talk at CES, Verizon CEO Lowell McAdam denied the report, but left open the chance of a possible partnership: "To say we are having significant acquisition discussions is not accurate."
Verizon has also had discussions with others in the programmatic ad industry including Yahoo. VZ could continue to wind down dialup biz.— Alex Sherman (@sherman4949) January 6, 2015
It's still unclear if anything will come of the talks, but the fact that the companies are in talks at all suggests a certain corporate affinity. If Verizon and AOL did join forces, the result would be a hybrid between a service provider and a media company, along the lines of Time Warner or Comcast (which owns NBC Universal). That would allow for new product integrations but also new conflicts of interest, as AOL content would be increasingly delivered over Verizon infrastructure. Verizon has drawn criticism for throttling traffic in the past, and the incentive to play favorites will be even stronger if the company expands into the editorial world.
1/6 11:35am ET: Updated to include Verizon CEO's comment