Could Verizon-AOL Deal Spark a Flurry of Industry Consolidation?

Could Verizon-AOL Deal Spark a Flurry of Industry ConsolidationWhen Verizon scooped up AOL for $4.4 billion last week, tongues were wagging about a host of issues.

But one of the big ones is the potential for a cascade of consolidation in the ad tech industry. That was the topic of a recent AdWeek story by Christopher Heine.

“Yahoo has reportedly considered making Foursquare a big offer in recent weeks,” writes Heine. “The Google-purchasing-Twitter chatter has gone on for months and won’t die. Yelp is reportedly entertaining suitors from Yahoo to Google and Amazon, with some analysts speculating that foreign companies Alibaba and Rakuten are in the mix. Even mighty has found itself the subject of speculation about a Microsoft takeover.”

Quoted is Rich Guest, president of North American operations for Tribal Worldwide, who believes a Twitter-to-Google hubbub makes the most sense.

“I think that there were first rumors of an AOL-Verizon tie-up during CES 2015, which gives credence to the school of thinking that believes ‘where there is smoke, there is likely fire,” said Guest. “Twitter is an amazing platform, which could add value to the product portfolios of many media or technology companies. Given all of the rumors of a Twitter-Google tie-up, I wouldn’t be surprised if that happened sometime in 2015.”

And then there’s MediaCom CMO Stephanie Fierman, who opined, “I think many expect a transaction involving Yahoo at some point in the foreseeable future.”

Many think mergers and acquisitions is hot now not only because larger companies want to bulk up with digital ad-selling machines, but out of fear the Federal Reserve’s close-to-zero interest rates could soon rise. That means any corporations looking to buy will want to act while money is cheap.

Was the Verizon-AOL hookup just the earliest marriage? We’ll soon see. After all, June — the month for weddings — is just around the bend.