Why would AOL or Verizon be interested in a strategic investment in the start-up Rollout.io

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Why would AOL or Verizon be interested in a strategic investment in the start-up Rollout.io

Hello - Thanks for choosing Wonder to find out more about Rollout's strategic value for Verizon/AOL.

Below I have structured the discussion of Rollout's potential value for Verizon/AOL into four aspects, as you requested earlier (current strategy, strategic complementarity, future business, and financial benefits).

Rollout's Technical Capabilities: Rollout automatically identifies the mobile app’s method of working and integrates patches or changes to the app’s code without users needing to take any action. Rollout describes their advantage as “Patch your app instantly”. Rollout’s technical advantage is that it allows developers code-level access to applications so they can make patches and instant changes and tweaks faster, and then release the app to users. Developers write new code or the “patches” in Rollout’s templates or dashboard, those patches are stored in the cloud and are activated when the application starts (without users needing to do anything).

Advances in the Current Strategy through Better Customer Experience: Verizon’s strategic emphasis is on creating value for the user through better customer experiences. Nearly one out of every three U.S. mobile users is a Verizon Wireless customer, so the company can potentially benefit from Rollout’s technical capabilities through improvements in mobile apps’ customer experience. More specifically, Rollout enables real-time changes in mobile apps by developers at the code-level. That in turn, enables faster improvements in the way mobile apps run. Fast code corrections without user intervention (e.g customers reporting problems in how their apps are running) can create better customer experiences (seamless, without any disruptions​). The advantages of that technical capability are improved/seamless customer experience, better/seamless integration of advertising apps in mobile devices (also a benefit for those in mobile marketing that seeks to match buyers and sellers through mobile ads).

Complementing Current Strategy: AOL’s Strategic focus is on delivering better content and advertising experiences. Complementary strategy opportunities: By simplifying the technology of mobile advertising, AOL can “plug in” leading partners like Kochava and Tune (two leading mobile technology providers)into the AOL-ONE platform. The linked “AOL Platforms” article discusses those opportunities in greater detail. Additionally, last year, AOL bought Adap.tv, a marketplace for selling digital video ads, taking the company from zero dollars in video revenue to hundreds of millions. AOL also owns The Huffington Post andTechCrunch, two mobile-heavy businesses. AOL has also unified these technologies to make it easy for advertisers to market across devices and screens. AOL also owns The Huffington Post andTechCrunch, two mobile-heavy businesses. Verizon has recently focused on a goal to increase video and streaming services. It launched its own stand-alone wireless video service in addition to acquiring AOL(as the linked WSJ article notes). Rollout’s technical capability can help AOL and Verizon take advantage of their platform and video assets and create new complementarities by integrating AOL’s platforms with content and apps from other providers, and by including video apps and new content from Verizon’s partners. For example, AOL’s acquisition of Millennial Media allows Verizon to combine their wireless customer data, AOL's large advertiser base and technology, Millennial Media's access to mobile ad inventory and offer this to marketers and agencies as an integration solution.

Exploration of New Businesses: Entering the market of programmatic mobile processes such as mobile ads, and mobile video. Recently Verizon acquired AOL for $4.4 billion. A primary reason for the purchase is AOL's advertising platform, which automatically helps its business customers buy and sell online ads while it also collects data on consumers' browsing history (as discussed in the linked Cnet article). If Rollout is integrated in mobile video apps, Verizon and AOL stand to benefit from potential new markets (video apps’ heavy users such as young adults, and mobile marketers). The business outlook for both mobile video and mobile app marketing/advertising is promising as shown by the increased use of “programmatic video” and broadly “programmatic” advertising in the mobile context (“programmatic” refers to the use of software to automate processes, such as selecting and buying online ads, video and other mobile content). Moreover, Rollout’s technology can help Verizon expand into international markets as one of its strategy goals is to increase its global reach.

Increased Financial Returns through Customer Retention and Customer Experience. Verizon has recently chosen to focus on its wireless business entirely; their approach was to divest wireline assets and place big bets on wireless. Verizon’s wireless business (as of 2014) accounted for nearly 70% of the company's total revenue (as reported in the linked articles: SeekingAlpha, and StopTheCap). Also, rivals such as T-Mobile and Sprint, are reducing prices and “stealing” customers from Verizon. If Rollout can help Verizon in customer retention, that would have a positive short-term financial impact (if not strategic in the longer term). For example, Rollout.io supports iOS6, iOS7, iOS8 & iOS9, and Android (as of Jan, 2016). Integrating Rollout into mobile services offered by Verizon/AOL can increase customer retention as a greater number of Verizon’s and AOL’s mobile and handheld device users will have technically better-functioning and faster mobile apps.

In summary, the mobile market (apps, advertising, and mobile platforms) are becoming increasingly critical for Verizon and AOL’s offerings. It’s harder for those companies to compete as a “silo” in the mobile technology markets. Integration and consolidation need to happen to mobile functionalities, apps, and customer data in order for Verizon/AOL’s offerings to become increasingly competitive in current and new markets. Technologies like Rollout, if integrated into applications and mobile platforms like the ones offered by Verizon/AOL’s can help those companies through faster and possibly real-time technical improvements, and as a result of that, through expansion into new markets for mobile users, improvements in customer experience and customer retention, and partnerships with content/advertising providers.

I hope you find this information useful; please feel free to contact us again, and thanks again for choosing Wonder!
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