US telecoms giant Verizon announced on Tuesday it was buying AOL in a deal that will see one of the world’s biggest mobile players takeover the one-time king of the internet for $4.4bn.

Verizon, the US’s largest mobile player, said it was making the move to strengthen its position in mobile video and advertising. The all-cash offer will give Verizon access to AOL’s advertising technology and content businesses such as Huffington Post, MovieFone and TechCrunch.

When completed, the acquisition will end AOL’s independence six years after the company was split off from media conglomerate Time Warner. The company has long been seen as a takeover target and had previously been rumoured to be in merger talks with Yahoo.

In an interview with financial news channel CNBC, AOL’s chairman and chief executive Tim Armstrong said the company needed to get bigger to survive amid the consolidation of the media and technology sectors.

“If you look at AOL over the last five years ... we turned the company around,” he said. “But if you look forward five years, you’re going to be in a space where there are going to be massive, global-scale networks, and there’s no better partner for us to go forward with than Verizon.”

Time Warner and AOL entered an ill-fated $165bn merger agreement in January 2000. The deal, effectively a takeover of Time Warner by AOL, has often been described as the worst merger in history and was a pivotal moment in the last tech boom. AOL continued to struggle as the phone subscribers who made up the bulk of its business drifted away to cable and was spun off from Time Warner in 2009.

Under Armstrong AOL has built an advertising platform and bought content companies including Huffington Post. The price is high compared to content rivals like Vice, now valued at $2.5bn. But it is a fraction of the values attached too the latest generation of hot tech firms. Snapchat, a profit free disappearing message service, is currently valued at $10bn. Uber, a taxi app and would-be logistics company, is valued at $15bn.

AOL is still heavily reliant on fees from dial-up internet subscribers who last year contributed about a quarter of AOL’s sales. Those subscribers either live in areas too remote for cable access or have forgotten to cancel subscriptions.

AOL took 0.74% market share of the $145bn digital advertising market worldwide in 2014, according to eMarketer. Google was the worldwide market leader with 31.4% share last year, followed by Facebook with 7.9%. While AOL remains a small player, the market is massive. Mobile advertising worldwide totalled $42.63bn in 2014, and is expected to increase 61% to reach $68.7bn in 2015, according to eMarketer.

Verizon’s offer values AOL at $50 a share, a 17% premium over Monday’s closing price. AOL shares rose 19% in morning trading to $50.61. Verizon shares dipped slightly.

“Verizon’s vision is to provide customers with a premium digital experience based on a global multiscreen network platform,” Lowell McAdam, Verizon’s chief executive, said in a statement. “This acquisition supports our strategy to provide a cross-screen connection for consumers, creators and advertisers to deliver that premium customer experience.”

In a statement Armstrong said he would remain at his position once the deal is finalized.

“Verizon is a leader in mobile and OTT [over the top – ie video services like Netflix and Hulu] connected platforms, and the combination of Verizon and AOL creates a unique and scaled mobile and OTT media platform for creators, consumers and advertisers,” Armstrong said.

The former Google executive, who took over as AOL’s chief executive in 2009, told staff that “AOL is back and now we are joining forces with Verizon to build the best media technology company in the world. Let’s mobilize”.

“AOL has once again become a digital trailblazer, and we are excited at the prospect of charting a new course together in the digitally connected world,” McAdam, said in a statement.

