The recent Verizon/AOL merger is a game changer. Verizon fights for subscribers within some very competitive markets and the AOL purchase is just one piece of the puzzle for them. Most of the articles that I have read have been focusing on Verizon’s potential for advertising data gathering and streaming video. However, that’s not the full story.
The New York Times reported, “By layering AOL’s technology atop its 109 million wireless connections and growing cable television business, Verizon is betting that it can make billions of dollars by selling ads against streaming video.” In addition, the article mentions that Verizon has also acquired EdgeCast, a content delivery network, and the assets of upLynk, a video streaming company.
What Verizon appears to be creating is an ecosystem, one with great potential and one that its competitors cannot match. None of them have a comparable mix of mobile, web, TV and delivery platform and infrastructure. Verizon’s acquisitions appear to be designed to provide editorial content and advertising on many different media channels. The company is shifting its focus on to the “empowered consumer.” Verizon’s recent move to unbundle its cable channels aligns with this as well. They are giving people the ability to get what, how and when they want something.
Analysts from MoffettNathanson are quoted in The New York Times article as saying, “Verizon is still, first and foremost, a wireless phone company.” But are they? It wasn’t that long ago that Apple was considered a computer company. In 2007, Apple dropped “computer” from its name and hasn’t looked back.
In today’s complex economy, ecosystems are becoming necessary for survival. Many organizations have designed strong engagement systems for their products. Apple is one obvious example. Tesla is another, as is Bloomberg with their Terminal and news platforms. No longer is a strong product enough. It must live within an ecosystem that can fulfill and engage the customer’s needs.
Much has also been written about the Huffington Post and how it fits within the Verizon umbrella. As part of the AOL deal, Verizon has also acquired AOL’s websites, such as the Huffington Post, TechCrunch, Engadget and AutoBlog. Natalie Robehmed of Forbes connects the dots in her May 13, 2015 article. “In many ways, this is vertical integration,” (M.S.) Krishnan (Professor of Technology & Operations at the University of Michigan’s Ross School of Business.) concluded. “Verizon and AT&T are carriers, but they want to get into media and content to increase the opportunity for revenue.” Could we be seeing some of this content on our TV soon?
Verizon’s content and advertising delivery platform sits within the intersection of content, technology, consumer engagement and data collection. These pieces together create a very powerful design thinking strategy.