Dive Brief:
- Verizon acquired Vessel, an Internet video startup, in order to deploy its technology in the Go90 platform according to Variety.
- Vessel as a standalone service will be shut down by Verizon on October 31.
- The video startup was co-founded by former Hulu CEO Jason Kilar who will not be staying on with Verizon, although most other former Vessel employees will join the Go90 team.
Dive Insight:
With digital video consumption growing and a possible AT&T/Time Warner merger looming, Verizon is taking steps to boost its video capabilities. Vessel was particularly targeted because its tech and software were seen as a way to accelerate Verizon’s Go90 over-the-top strategy. GM of Verizon Entertainment Chip Cantor described the acquisition as a “smart pairing” given Vessel’s experience in content discovery and recommendations, over-the-top subscription management and user experience.
“With Richard Tom (Vessel CTO and co-founder) leading technology and operations and Lonn Lee heading up product, we have the utmost confidence in our ability together to rapidly execute and enhance our products,” Canter said in announcing the deal.
While there is something of an arms race with major telecoms, heightened by the potential AT&T deal, Verizon has been active in the last year acquiring AOL for $4.4 billion and Yahoo’s core internet business for $4.8 billion after a bidding process. While those deals focus on expanding Verizon's marketing services offerings, the Vessel deal underscores that a strong video content strategy is critical for digital monetization efforts going forward.