The US telecoms firm Verizon is to pay $4.4bn (£2.8bn) for AOL in a deal that will see it enter the competitive online video market.
Verizon Communications said it was to pay $50 per AOL share – a 15% premium to AOL’s closing price on Monday.
The purchase of AOL, which has The Huffington Post, TechCrunch and Engadget in its stable, allows Verizon to not only enter the mobile video space but also grow its advertising platforms.
New York-based AOL, which launched its first online service 30 years ago, is the largest wireless carrier in the US, as well as an Internet and TV provider.
The brands would remain separate under the deal, which is due to complete later this summer, with AOL’s chairman and chief executive Tim Armstrong remaining in charge.
Verizon’s chairman and chief executive, Lowell McAdam, said: “Verizon’s vision is to provide customers with a premium digital experience based on a global multi-screen network platform.”
It had said last month it was preparing to launch a video service targeting mobile devices and it was establishing partners to deliver that content.
Verizon may be best-known in the UK for its past link to Vodafone, which announced in 2013 that it was selling its 45% stake in their joint venture, Verizon Wireless, for £84bn.
Verizon is looking to enter markets currently dominated by Google.
AOL had a 0.74% share of the $145bn digital advertising market worldwide in 2014, according to eMarketer.
Google, which had a 31.4% share, had 38% of global mobile advertising while ad spending on digital videos totaled $5.8bn.
It was estimated by eMarketer that 153 million people in the US would watch TV shows on digital devices at least once per month.
That is almost 48% of the population.