Good Question: Why Is AOL So Valuable?

MINNEAPOLIS (WCCO) - You've got mail! Remember that slogan? It's probably what many people think of when they hear about AOL. But on Tuesday, the communications company was back in the news after Verizon announced it will buy AOL for $4.4 billion.

So, what makes AOL so valuable?" Good Question.

"AOL is not the company it once was. We think of AOL of a certain age, dial-up, 'you've got mail,'" said Jill Schlesinger, CBS News Business Analyst for CBS News. "There's a certain connotation to it."

But since the late 1990s, AOL has changed from solely an internet service provider to a content company. It owns several websites, including the Huffington Post and Engadget.

Dave Vang, a professor of finance at the University of St. Thomas, said AOL made some smart moves under its current CEO, Tim Armstrong, a former Google executive.

"Where their real value is coming in right now, where AOL has done some smart purchases of other firms that are in the advertising part of the internet, so this is why Verizon wants them," Vang said.

AOL has invested in the technology behind mobile advertising, a $600 billion industry that Verizon wants to access. Experts say Verizon wants to expand beyond just delivering the content, but rather make money on selling ads on that content.

"It [AOL] actually has a way for buyers and sellers to get together online and use their platform to place ads," Schlesinger said.

AOL also still has 2 million subscribers who pay for its dial-up service, which brought in an estimated $600 million in 2014.

"It's a substantial amount with no additional work on their part," said Vang. "It's their cash cow to buy some of these other firms that have a lot of growth."