Bending Spoons, an Italian app aggregator, has struck a deal to acquire AOL from Apollo Global Management. To the surprise of people who once thought the internet gateway had nothing left to offer. The buyer, newly energized by a high-tech shopping spree, continues to maintain that AOL is an “iconic” brand. That is, a large email platform that hides unrealized value. I’ve simply made a bet:
What Bending Spoons gets: scalability
Bending Spoons claims that AOL ranks among the top four email providers in the world, with approximately 8 million daily and 30 million monthly active clients — and that more than half of this usage over a year is unusually high. Email is an identity layer for consumers: where they make purchases, where bills are sent, and where password resets and family messages are received after years — even decades — of inaction.
AOL also has a diversified wealth of consumers that many technology companies struggle to find. Although the firm had previously ceased its dial-up service, the portal and mailbox maintained interdependence. Weather, finance, and lifestyle information and sports content stimulated a fierce audience mix that forms the basis for monetization.
Financing package and comparisons to past AOL valuations
Bending Spoons is funding the transaction through a $2.8 billion package put together by a group of banks. The purchase price was not revealed by the companies involved, although Axios reporter Sara Fischer estimated it to be approximately $1.5 billion, which is far below the $4.4 billion that Verizon paid to purchase AOL in 2015. It is also miles apart from the $350 billion valuation the AOL Time Warner merger was worth before it crashed, and Verizon later bought AOL and Yahoo, combining them into a single entity, which was eventually sold to Apollo for $5 billion. The urge to get into the media and advertising market for the first time is a gamble.
Skepticism, layoffs, and operational risks after the deal
Not everyone is persuaded. Platformer’s Casey Newton has called the fact that Bending Spoons buys “dying tech brands” and then hikes prices, “squeezing the loyalists.” That characterization is hotly denied. Profitability, shipping velocity, and user retention across every property the company has purchased have all improved, it argues.
Nevertheless, a lot of the patterns encircling the transactions have also entailed significant layoffs, with U.S.-based development work moving to Europe — perspectives presented as lacerating but essential for long-term viability by CEO Luca Ferrari. The reputational threat is genuine. Subscribers to AOL inboxes are hypersensitive to mailbox consistency, price hikes, and the quality of the spam filters. A single misstep can cause a stampede that is difficult, but not impossible or improbable, to reverse.
The first litmus tests after AOL’s purchase will be the ability to successfully move back-end systems without much trouble, consistency in deliverability, and service and customer support excellence.
Why AOL might fit Bending Spoons’ strategy right now
Email has become a durable cash-flow motor across tech. It has a high retention rate, high utility, and offers an opportunity to bundle collateral services that unlock adjacent opportunities. AOL offers Bending Spoons a developed and scalable source that Bending Spoons may use to sell new premium mailbox strategies, high-security specifics, and identifier-specific tools to maximize profits.
The complete functionality of AOL offers premium ad inventory and an advertising exterior for positioning new products. This practicality is particularly critical as acquisition costs rise. We also have a data advantage. Product signals, abuse signs, and ad targeting signals are informed by perception across millions of mailbox users. Whether Bending Spoons can raise AOL’s deliverability and lessen inbox noise with better elimination of abuse signals and superior machine learning tactics determines whether AOL’s time will rise.
And finally, investing in an asset that is trading at a steep discount to its historical valuations leaves room for the next owner to invest on good enough terms without needing to make any optimistic predictions. By “modernization,” I mean faster web apps, clearer settings, considerate pricing, and customer support. Done right, AOL’s durable UI could grow into an even more long-term, magnetic business.
What to watch next after the acquisition closes
The items that will determine the future will be meaningful very soon after the completion of the sale:
- Smoking guns about who’s leading the effort
- A public product timeline
- Plans for support
Look out for:
- Changes in mailbox performance
- Announcements of new paid tiers or bundles
- Hints of product consolidation with Bending Spoons and others
Finally, staffing: if Bending Spoons relocates some workers abroad, which product features are going to slip?
For all the affection people have for the AOL icon, there is little else to this deal than a couple of hundred million inbox bubbles. Done correctly, those bubbles could float back to alienation povistr, a more energizing platform for long-term creation.