Verizon announced Tuesday that it's buying AOL for $4.4 billion, $50 a share, all cash. Tim Armstrong stays on to run it. The deal's supposed to close sometime this summer, pending the usual regulatory rubber-stamping. Every outlet with a business desk has already run the "what does Verizon want with a media company" piece, so I'm not going to redo that math here. Short version, because it matters for what I actually want to talk about: Verizon wants AOL's ad tech (the stuff that runs under the name AOL Platforms) and its video and mobile advertising reach, because Google and Facebook are eating that market alive and Verizon would like a seat at the table before its network business gets fully commoditized. Huffington Post, TechCrunch, Engadget, MapQuest, all of it comes along as a bundle.
What I keep getting stuck on, though, isn't the ad-tech strategy. It's that AOL still exists as a company you can buy for $4.4 billion, and that number felt small to me before I made myself remember what AOL actually was.
I grew up with an AOL disc taped to the front of computer magazines. Not one disc — dozens, over years, each one promising some absurd number of free hours, 250 hours free for 45 days, that kind of thing, like they were trying to get you hooked on a drug before the trial ran out (which, functionally, they were). We had a 56k modem in the room my dad used as an office, and the sound it made connecting was this specific screech-and-static thing that I could probably still hum for you if you asked. You'd hear it through two walls and know instantly whether the connection had failed halfway through, because the pattern changed. My mom still has an AOL Mail address from roughly 1998 and refuses to migrate off it, and I get looped into "why can't I open this attachment" phone calls about twice a year because of it. That's not a complaint about AOL specifically, it's a complaint about how nobody in my family will ever change an email address as long as they live, but AOL is the one that started it.
At its peak, in early 2000, AOL was worth something like $165 billion and used that valuation to buy Time Warner in a deal that's still taught as a cautionary tale about paying dot-com prices for real assets. Fifteen years later it's a $4.4 billion line item for a phone company that mostly wants the advertising plumbing and is fine keeping the news sites as a side benefit. That's the part that actually says something, more than any of the "synergy" language in the press release does. It's not really a story about AOL failing, or at least not only that, dial-up was always going to die the second broadband got cheap and ubiquitous, that's just physics. It's more that the company managed to reinvent itself into something else entirely (content plus ad tech) and is still around, still profitable enough, still worth acquiring, while doing almost none of what made it a household name in 1998.
I don't think Verizon particularly cares about any of that history, and there's no reason they should. But I do think it's a little bit funny that a company famous for mailing you free coasters is now valuable specifically because of the unglamorous back-end advertising infrastructure nobody outside the industry has ever heard of. The brand people remember and the business that's actually worth money are two completely different things wearing the same three letters.
If you want my actual prediction, since apparently that's the game now: the AOL name mostly disappears from consumer-facing stuff within a couple years and gets used as an internal umbrella term for the ad platform, while HuffPo and TechCrunch and Engadget keep running more or less as they are now because shutting down a working media property makes for bad headlines even when nobody at Verizon particularly loves owning one. I'd bet on that before I'd bet on Verizon actually turning AOL Mail into something anyone under thirty signs up for on purpose.
Anyway. Somewhere there's a landfill with a few million free-hours CDs in it, and none of them still have any hours on them.