AABA Altaba Inc

By Mike Shields 

AOL Chief Executive Tim Armstrong said he's "cautiously optimistic" that Verizon's acquisition of Yahoo will go through despite the internet company's disclosure this fall that it suffered a significant data breach.

Speaking during a keynote interview at Business Insider's Ignition conference in New York on Monday, Mr. Armstrong said the deal has a better chance of going through than not.

Meanwhile, the digital media veteran said he's been working closely with Yahoo Chief Executive Marissa Mayer on strategy and structural planning as if the deal will close. And he's been impressed with some of Yahoo's plans for 2017 outside of the integration work.

"The data breach that happened at Yahoo slowed things down," Mr. Armstrong acknowledged. "There's been a constructive dialogue." He said the next 60 days will be crucial for putting the pieces together assuming Yahoo becomes part of the Verizon family.

In September, Yahoo revealed it had been hit with a data breach that potentially impacted 500 million users. The next month, Verizon's legal representative indicated that the breach left an opening for the terms of Verizon's agreement to acquire Yahoo for $4.8 billion to be revisited.

"Marissa and her team are doing the best job they can of dealing with it, " Mr. Armstrong added. "[Data hacking] is a reality that many people are dealing with today."

Beyond the Yahoo deal, Mr. Armstrong predicted that over the next few years, as more companies in digital media grapple with Google and Facebook's advertising dominance , there will be more consolidation driven by a desire to build larger audience scale.

The ad market is headed toward a place where in terms of audience reach for media companies, "millions are less important than billions," he said.

Naturally, he believes that AOL, coupled with Verizon's data and potentially Yahoo's audience, will be a player in that future. Mr. Armstrong has in fact said that the company is looking to reach 2 billion consumers by 2020.

He said Verizon's opportunity to challenge Facebook and Google will be to go after traditional brand marketers -- that is, companies that have traditionally spent big on TV ads.

Write to Mike Shields at mike.shields@wsj.com

(END) Dow Jones Newswires

December 05, 2016 18:58 ET (23:58 GMT)

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