In light of the infamous AOL merger with Time Warner, today’s news that Verizon (RSH) is buying AOL (AOL) for $4.4 billion was met with some skepticism and, in many cases, teasing.
Fast Company wrote that people “seemed surprised… to be thinking of AOL at all.” Fortune’s own Stephen Gandel wrote that at $4.4 billion, Verizon is “paying through the nose,” while Erin Griffith wrote that this deal is centered around online advertising technology, which “isn’t a business Wall Street likes or even understands.” Business author Paul Colligan tweeted that the deal was on par with, “picking up Sears for ecommerce.” Donald Trump added that it is a “stupid deal” for Verizon and that “AOL has been bad luck for everyone who touched it.”
One of the most telling signs of how far AOL has fallen is how paltry the price tag looks when compared to recent offers for super-young startups. Here are just a few examples:
- AOL is worth just over four Instagrams (the photo-sharing app sold to Facebook in 2012 for $1 billion).
- AOL is worth four Tumblrs (the company sold to Yahoo for $1.1 billion).
- AOL is worth barely more than Facebook (FB) deemed Snapchat worth nearly two years ago, when it reportedly offered $3 billion for the app and got turned down.
- AOL is worth less than a quarter of WhatsApp, which Facebook bought last year for $19 billion.
Here are some more comparisons:
AOL
Founded: 1991
Employees: 4,500
Revenue: $2.32 billion (2013)
Value: $4.4 billion
Founded: 2010
Employees: 13 (at time of sale)
Revenue: $700 million (projected 2015); none at time of sale
Value: $1 billion
Snapchat
Founded: 2011
Employees: 35
Revenue: Undisclosed (none in 2014)
Value: $15 billion
Slack
Founded: 2013
Employees: 100
Revenue: $12 million (reportedly)
Value: $2.8 billion
Founded: 2010
Employees: ~500
Revenue: Undisclosed (reportedly none)
Value: $11 billion
Trulia
Founded: 2004
Employees: ~620
Revenue: $144 million (2013)
Value: $3.5 billion (sold to Zillow in 2014)