News of Verizon’s deal to buy AOL sparked a memory for industry analyst Roger Entner of Recon Analytics.
“This reminds me of Gary Forsee,” Entner said of the one-time chief executive officer of Sprint.
Forsee, who led Sprint from 2003 to 2007, had told Entner about his vision to make Sprint a media company that would marry its wireless network with content. That’s just what Verizon is doing by turning to AOL’s streaming video service and advertising technology.
The marriage didn’t develop at Sprint, Entner said, and the company continues to work on “the basics” of providing a strong and reliable network experience.
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Sprint declined to comment on the Verizon transaction.
Verzion sees video eating up more and more of the traffic on its network and wants part of that business. It has plans to launch a mobile video service later this year.
Analysts say buying AOL gives Verizon content to provide and gives Verizon the technology to sell ads on that wireless content — more ways to earn money while running a wireless network.
“This strategy speaks to a possible sea change in wireless monetization,” analyst Craig Moffett wrote to clients of MoffettNathanson Research. “Verizon is pointing to a future where advertisers, rather than (wireless) users, carry a heavier burden.”
Verizon already has other revenue sources that Sprint lacks, and tacking on a stream of advertising revenue would widen the differences between them as competitors.
“If it works, then yes, it adds to the distance,” Entner said.