Verizon is in the final throes of acquiring the modern day AOL. And while Google, and likely a few others are in the wings, unless something last minute happens AOL for the second time will be acquired by a legacy company from the old school era who is looking to move fully into the digital realm.
Unlike Time-Warner, we all have to believe that this time around the leadership of the acquiring company won't stick their paws into the more modern company like Time Warner did, where their own agendas like rolling out phone service on Time Warner Cable led to the demise of AOL Phone Line, their interests with Warner Bros. records stifling the growth of WinAmp and other music related properties and WASTing talent like Justin Frankel and Rob Lord who invented WinAmp over internal political agendas. In a nutshell what could have transformed Time Warner set them back ten to fifteen years by one mistake after the other. In my view, Verizon isn't going to do that and Tim Armstrong will be the anointed one to lead the charge.
Let's look at why Verizon needs AOL. For starters once you go beyond the fact that they are the largest mobile operator in the country, you will see also that their footprint is mostly concentrated in the portion of the USA that is the most densely populated. The northeastern corridor between Washington D.C. and Boston, MA. This is also the most wired part of the USA, albeit with older DSL and some FIOS where they built it out. What's more, that's also the biggest concentration of media dollars, and where a good number of the top ten media markets reside other than Dallas, Los Angeles and Chicago.
Verizon, with their media acquisitions, like NFL football, needs an ad sales team and the technology to compete, not with AT&T, or even Google, but to compete with Comcast and Cablevision head on for media dollars.
And there in lies the conundrum for Verizon. Given how much of the market they control with distribution and how they need to pass muster on the acquisition with the DoJ and FCC, they will need to divest themselves of the media properties of AOL, and keep the ad sales and serving technology, plus much of what has been forgotten about that actually makes AOL an interesting acquisition. The IP. They can also sell off the dial up business as that's an expense over time, despite looking like a cash cow today, as they can't offer those people what the benefits of digital really offer.
That leads to what happens to the media properties of AOL. In my mind the answer lies in the Washington Post and their owner, Jeff Bezos. Often forgotten is how Amazon buys and builds to grow. Buying up the media properties, with or without the Huffington Post-which alone will drive a high price-will be a killer acquisition for Bezos and the Post.
After that happens, and this is purely my speculation, the Post team would be smart to create the modern day "Huntley and Brinkley," "Siskel and Ebert," "Abbott and Costello," "Laurel and Hardy" or heck, "The Odd Couple" of business and technology by snapping up Michael Arrington and Om Malik and putting them together to be heads of tech and business coverage. Love em or hate them, in their day, the two who often crossed swords always respected one another online for breaking stories, providing credible insight and relentlessly worked sources. By doing that, the Post would immediately have a powerhouse at the top of the news side of business and technology, and could quickly integrate the rest of the properties in those spaces below one or the other.
Can all this happen? Maybe...but the AOL purchase by Verizon will happen as long as the regulators feel comfortable that there isn't more concentration of power in the hands of an already oversized giant.