AOL (AOL) has been taken out by Verizon (VZ) as of yesterday for $4.4 billion.
The move surprised many in the tech world who forgot about the company Tim Armstrong has been working hard at resurrecting for six years now.
The move, which really shouldn't be a big surprise to most who've followed AOL at all, has sparked a round of articles speculating about which other companies like AOL are going to be the next ones to get acquired.
That's a tough line of reasoning to follow though. There aren't that many companies like AOL, which is a jumble of a brands (content) business with a dial-up biz and an ad tech business.
Most people today seem to be saying that AOL was bought for its ad-tech, which Verizon seems to want to leverage to buy programmatic advertising ¿ the new way of buying ads in a mobile world. I agree with that interpretation.
The name which I have seen mentioned more than any other as the next likeliest company to be acquired is Yahoo! (YHOO). Today, Yahoo!'s stock is up even more than Alibaba (BABA). That's unusual.
However, AOL's deal with Verizon means nothing for Yahoo!. Yahoo! currently has a 35% stake in Yahoo! Japan which is valued at $8.4 billion. It has no plans to spin it out ¿ although it said that it was going to hire some advisors to look at the idea in the future.
Yahoo! CEO Marissa Mayer is effectively using the YJ stake as a poison pill. Anyone who would like to buy Yahoo! has to pony up $8.4 billion as well to buy that YJ stake, which frankly isn't growing much. Anyone who thinks they can do something with the Yahoo! core will say "forget it" to that notion.
AOL did an admirable job building up a set of programmatic assets through acquisition. Yahoo! has been less forward-thinking. Its big purchase in the space was BrightRoll at more than twice the multiple paid by others in the space and twice the purchase price paid by Facebook (FB) for LiveRail.
Yahoo! has built up its own Gemini ad platform, but you'd have a hard time concluding that it's a programmatic play.
Therefore, in the short-term, Yahoo! won't be bought by anyone just because of Verizon's move. The biggest thing that the AOL deal might do though is get people like Comcast (CMCSA), Time Warner (TWX), and Disney (DIS) thinking about how they're going to respond to the potential move of TV ad dollars to programmatic in the coming years.