The AOL-Verizon deal is mostly about adtech — and that's good news for Baltimore - Technical.ly Baltimore

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May 13, 2015 9:28 am

The AOL-Verizon deal is mostly about adtech — and that’s good news for Baltimore

Verizon clearly sees Advertising.com — the local outpost of the AOL empire — as a major source of what's working.
AOL CEO Tim Armstrong is happy to be joining Verizon.

AOL CEO Tim Armstrong is happy to be joining Verizon.

(Photo by Joe Corrigan/Getty Images for AOL)

As the news of Verizon’s sudden announcement that it plans to buy AOL for $4.4 billion settled in on Tuesday, surprise gave way to the inevitable ’90s nostalgia. The Washington Post even found a gentleman who still uses AOL’s dial-up service.

The message baked into the snark was this: The AOL of today is nothing like it was in the days of “You’ve Got Mail” (even though dial-up still generates big profits). It is now a media company that owns the likes of the Huffington Post and TechCrunch and specializes in mobile video content. And, most of all, it has vast capabilities in digital advertising.

Because of the latter point, most people around Baltimore’s tech community already know this.

Back in 2004, four years after the infamous Time Warner merger, AOL bought Baltimore-based Advertising.com. Time Warner isn’t with AOL anymore, but Advertising.com still is.

And it’s a major anchor of Baltimore’s tech community.

The 200+ employees that recently moved out from Under Armour’s shadow in Tide Point to a new space in the Natty Boh Tower complex constitute one of the biggest tech shops in the area. The company often bring folks together for meetups, and plenty of former employees have gone on to key roles in local startups.

The ink hasn’t even been pressed to paper on the sale, but so far, talk surrounding the merger indicates that, like Baltimore, AOL also sees Advertising.com as a major source of what’s working.

The press release that announced the deal frequently mentioned advertising as a reason behind the acquisition, and any number of national tech journalists said adtech was the key to the deal, even as they admitted they don’t understand it.

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As Verizon pushes toward mobile and video content with the likes of big-money brands like the NFL, the company needs a steady stream of advertising to keep making money. Increasingly, the advertising industry is pushing toward programmatic — or automated — campaigns, and Verizon needed a company that knew this emerging space well.

That seems to point to stability on Brewers Hill. There was no official announcement about Advertising.com in all of Monday’s talk, but sources indicated that the company continues to operate full speed ahead.

For employees, the deal is being pitched as a means to scale what AOL is already doing. In a memo released to “AOLers” on Monday morning, AOL CEO Tim Armstrong (who is staying on in the acquisition) described the path forward like this:

The deal means we will be a division of Verizon and we will oversee AOL’s current assets plus additional assets from Verizon that are targeted at the mobile and video media space. The deal will not change our strategy – it will expand it greatly.  The deal will give our content businesses more distribution and it will give our advertisers more distribution and mobile-first features. The deal will add scale and it will add a mobile lens to everything we do inside of our content, video, and ads strategy.

The deal also has plenty of implications for the adtech space, which is seen as one of the four “pillars” of Baltimore’s tech economy, along with cybersecurity, edtech and health. With Millennial Media headquartered here, AppNexus having recently planted a flag and startups like Staq, the ripple effects of the deal should also be visible in Baltimore. We’ll be keeping tabs on this story in the coming weeks and months.

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Companies: AOL/Ad.com, Verizon
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