Why Verizon Coveted AOL’s Ad Technology and Mobile Video

As a standalone company since 2009, AOL has become a competitor in the growing online advertising business. That transition helped attract interest from Verizon, the largest US wireless carrier, which agreed to buy AOL for about $4.4 billion. What Verizon wants is to make more money from mobile video, and the new AOL can help. AOL is now focused on online video and on so-called programmatic advertising, which uses computer algorithms rather than salespeople to buy and sell ad space on websites.

The system works like an online marketplace: a shoemaker, for example, can get a display ad on a website in milliseconds, less than the amount of time it takes a reader to load a Web page. And data gathered on people’s browsing habits helps the shoemaker reach the right consumer with the right ad at the right time. The goal is to become an automated middle man between advertisers and publishers. Last month New York-based AOL unveiled technology called ONE that helps marketers decide where to best spend their money, putting it in direct competition with two online ad giants, Google and Facebook. The technology allows advertisers to see whether consumers are buying more products after seeing an ad on a smartphone, and enables them to shift more spending to mobile devices from desktops and television.