Verizon's Video Play in AOL Deal No Sure Thing

Although the planned $4.4 billion acquisition of AOL AOL opens

Verizon's new mobile video offering won't replicate the traditional television experience, but instead will feature a mix of live (primarily sports and cultural events) and on-demand programming designed to appeal to younger viewers. Verizon has said previously that it sees three paths to monetizing this offering: subscriptions, increased data consumption, and advertising. Adding AOL's ad platforms will expand Verizon's ability to capitalize on the advertising opportunity, providing its content partners with the ability to maximize the value of ad inventory available on the new service.

Verizon may be able to uniquely combine its customer knowledge with other sources of information to create highly targeted ads for marketers. However, other competitors in the mobile video and advertising industry potentially have the advantage of greater reach, for both consumers and advertisers, should Verizon favor the content available via its own service. The perception of such favoritism could also harm Verizon's market position.

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