(CNBC) Verizon announced Tuesday it had closed its acquisition of AOL, saying the deal gives the telecommunications giant the opportunity to be a leader in technology and media, AOL’s CEO, Tim Armstrong, said.
“We did start out with a number of discussions around a joint venture, but we quickly saw there was a vision that we both believed in where we could be the No. 1 global media technology company, and if we put our assets together, we thought we could make something very, very big out of this,” Marni Walden, Verizon’s president of product innovation and new businesses, told CNBC’s “Squawk on the Street” Tuesday.
Armstrong explained that being the No. 1 global media technology company would require the companies to leverage Verizon’s network and AOL’s strength in advertising and its position in the growing areas of video and mobile.
“There’s what we call the 40-40 opportunity, which is $40 billion going to mobile and $40 billion going to video,” he said, adding that AOL would layer content services over Verizon’s network.
“Nobody owns the future of mobile right now and this is the most powerful combination of those two areas, of the Internet and mobile together,” Armstrong told “Squawk on the Street.”
Verizon announced last month it had reached an agreement to acquire AOL for $50 a share in a deal valued at about $4.4 billion. The telecommunications giant said at the time the acquisition would further its strategy to build out its LTE wireless video and streaming video strategy.
The company also said AOL would contribute to its “Internet of Things” platform, a technology that helps Web-enabled devices communicate and coordinate with one another.
AOL’s advertising unit, which has outpaced revenue growth among its content brands, is also seen as a valuable asset. Its success fueled speculation that the company’s ad technology platform was at the heart of Verizon’s bid.
In recent weeks, Armstrong and Verizon have sought to counter those reports, saying they would not spin off AOL’s flagship news site, The Huffington Post.
“Why do I love HuffPost? It’s because consumers love HuffPost,” Walden said. “We think that’s really critical. You’ve got to connect with the consumer. You’ve got to make sure that they want to come back, and HuffPost does that.”