Telecom giant Verizon Communications Inc. (VZ) has approached web services company AOL Inc. (AOL) about a potential acquisition or joint venture as part of efforts to expand its mobile-video offerings, Bloomberg reported Monday, citing people with knowledge of the matter.
However, Verizon has not made a formal proposal to New York-based AOL and no deal is imminent, according to the Bloomberg report. AOL was spun off from Time Warner Inc. (TWX) in December 2009.
Verizon is said to be primarily interested in AOL's programmatic advertising technology, or the automated buying and selling of ads online. An acquisition of AOL would also enable Verizon to gain AOL's Internet properties, including the Huffington Post and about 2.3 million AOL subscribers who pay for Internet access.
Verizon is said to be seeking to catch up with rival AT&T Inc. (T), which last year struck a $48.5 billion deal to acquire satellite TV provider DirecTV (DTV).
However, in July 2014, Verizon's CEO Lowell McAdam said in an interview with CNBC that his company is not interested in a large acquisition after its $130 billion purchase of Vodafone Group Plc's (VOD, VOD.L) 45 percent stake in Verizon Wireless.
Activist investor Starboard Value LP said in September that it has acquired a significant ownership stake in Yahoo! Inc. (YHOO). Starboard Value also delivered a letter to both Yahoo CEO Marissa Mayer and its board, wherein it urged that company to seek a possible combination with AOL.
VZ closed Monday's trading at $46.57, down $0.39 or 0.83 percent on a volume of 18.96 million shares. However, in after-hours, the stock gained $0.16 or 0.34 percent to $46.73.
AOL closed Monday's regular trading at $44.74, down $0.75 or 1.65 percent on a volume of 548,435 shares. In after-hours, the stock gained $5.31 or 11.87 percent to $50.05.
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