AOL lands Verizon advertising deal

By Reuters
Published: April 13, 2008 9:22 PM PDT

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Time Warner's AOL landed one of its biggest advertising deals since the division's restructuring as the sole representative of telephone company Verizon Communications' online advertising inventory.

The timing of the announcement expected on Monday is ironic as Verizon sued Time Warner Cable last week accusing the majority-owned cable TV operator of false advertising related to Verizon's Fios high-speed Internet and television service.

The agreement expected to be announced on Monday, an AOL executive said, comes amid Time Warner's ongoing talks to combine AOL with Yahoo to rival Microsoft's estimated $42 billion offer to buy Yahoo.

The Verizon deal is viewed as a coup for AOL's Platform-A advertising unit, as deal makers at Microsoft, Yahoo, and AOL jostle to take a bigger stake in the business of selling display advertisements.

Platform-A is the centerpiece of a restructuring of the once great Internet division responsible for generations of first time Internet surfers.

Reports of Time Warner's discussions to combine Yahoo and AOL values AOL, excluding its dial-up Internet access business, at around $10 billion. That is a far cry from the zero value ascribed to AOL within Time Warner's current valuation, according to analyst estimates.

The Verizon ad deal, whose price was not disclosed, will give Platform-A the right to represent all of Verizon's advertising space on the Internet, including premium space, the companies said.

"We're all about working with Web sites to serve whatever needs they have," Lynda Clarizio, president of Platform-A.

The deal also expands its relationship with Verizon Wireless. Platform-A will manage the sale of the majority of Verizon's Wireless Web advertising inventory.