By John Kell and Alan Murray
May 13, 2015

The Verizon/AOL merger is really about big data.

 

Just minutes after pressing the button to send yesterday’s CEO Daily, we learned about the planned merger between Verizon and AOL. The media world lit up over the prospect of Verizon owning the Huffington Post. But Fortune’s Erin Griffith quickly pointed out this deal is not about media content – it’s about mobile advertising. (Mathew Ingram even speculates HuffPo may be sold.)

 

And this is where the merger gets interesting. AOL CEO Tim Armstrong, a consummate salesman, has been promoting his company’s ability to serve targeted ads to select audiences with great vigor. (He sketched it out on a Fortune white board last month.) Verizon has data that could make that targeting far, far more powerful. If you own a Verizon mobile phone, the company follows you all day long. You visit Starbucks regularly? The new Verizon could give you a coupon for a competing coffee shop. Hanging out at the mall? It could serve you a J. Crew ad for a nearby store. The company will have to find ways to ease privacy concerns, as this sort of targeting can feel creepy. But the combination makes Verizon a potential rival for Facebook, which currently dominates mobile advertising.

 

We suspect this is what Verizon was referring to in a jargon-filled press release that said the merger “will also support and connect to Verizon’s IoT (Internet of Things) platforms.” We don’t yet have a good vocabulary to describe this new, data-saturated business world… but it is happening fast.

 

Enjoy your day. And don’t hold your breath waiting for Congress to pass the trade bill.

 

Alan Murray
@alansmurray
alan.murray@fortune.com

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