Needless to say, the AOL that Verizon is acquiring today is a very different company from the one that was doing the buying during the last tech boom.
With its stock inflated by dot-com mania, AOL was worth $224 billion in today’s money back in 2000, just before it launched an audacious, expensive, and ill-fated bid to combine with Time Warner.
Nothing about AOL today is on the same scale as back then. In a neat bit of symmetry, the $4.4 billion price tag that Verizon is paying to buy the whole of AOL today is the exact same amount as the company’s dial-up subscription revenue in the year 2000. (Which would nonetheless be worth more now, $6 billion, after adjusting for inflation.)
Obviously, Verizon is not buying AOL for its dial-up business. AOL today is a major player in the online ad market, with its advertising platform generating around three-quarters of its sales, versus only a third back in 2000. It may have a third of the employees and a quarter of the sales that it did in its heyday, but AOL is still worth billions, albeit in the single digits rather rather than hundreds of billions.
* Dollar amounts adjusted for inflation
** Market cap on eve of Time Warner deal announcement in 2000; value of Verizon’s bid in May 2015
Note: Numbers are for the fiscal years ending June 2000 and December 2014, unless otherwise specified.