As the US phone market is getting increasingly saturated, major wireless carriers are all looking to diversify their revenue streams and continue to grow. Most see content as the most logical next step in that endeavor which is why the two largest wireless providers in the country have recently been shopping for new businesses to acquire in order to merge their products with their existing services. Of course, we're talking about Verizon and AT&T. Back in 2015, Verizon acquired AOL and is currently haggling with Yahoo for its Internet business, all of which as a part of the company's new online video content strategy. As for AT&T, after purchasing DirecTV last year, the carrier just dropped a bomb of an announcement by unveiling that it's planning to conduct a vertical merger with Time Warner for $86 Billion.
Can Verizon possibly top that? Probably, but it's still content with continuing its policy of smaller, highly strategic acquisitions. In fact, one such purchase has just been announced. In a short press release published yesterday, Verizon confirmed that it's buying Vessel, a San Francisco, California-based video startup founded by ex-Hulu CEO Jason Kilar. While the US carrier is planning to integrate Vessel's existing video technology into its services, it has no intention of continuing to support the company's own product and will be shutting it down soon.
As a part of this deal, Chief Technology Officer at Vessel, Richard Tom, will be joining Verizon as CTO of the company's digital entertainment division. Unlike him, Kilar will be leaving Verizon shortly after the acquisition is complete. No specific dates have been given, but Verizon stated that the transaction should go through by the end of November. While rumors of this deal have been circulating the industry for over a month now, we still have no idea how much Verizon will pay for Vessel, and that isn't likely to change anytime soon. Namely, Verizon refused to disclose details of the transaction and as Vessel also isn't keen on revealing the number of subscribers it has, estimating the worth of this Californian startup is nigh on impossible. Regarding existing Vessel subscribers, Verizon's Entertainment General Manager Chip Canter told Recode that all of them will be eligible for a prorated refund after the service shuts down. In addition to that, no customers will be charged for using Vessel during October.