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CNBC Transcript: AOL CEO Tim Armstrong Speaks with CNBC's Julia Boorstin on "Squawk Box" Today

WHEN: Today, Monday, September 29th

WHERE: CNBC's "Squawk Box"

Following is the unofficial transcript of a CNBC interview with AOL CEO Tim Armstrong on CNBC's "Squawk Box" today. Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000315432 and http://video.cnbc.com/gallery/?video=3000315438.

All references must be sourced to CNBC.

BOORSTIN: THANKS SO MUCH. TIM ARMSTRONG, CEO OF AOL. THANK YOU FOR JOINING US THIS MORNING FROM AD WEEK. BEFORE WE GET TO THE HEART OF THE AD WEEK NEWS, I HAVE TO ASK YOU ABOUT YAHOO!. ARE YOU MAKING A DEAL WITH YAHOO!?

ARMSTRONG: JULIA FIRST THIS IS OUR FIFTH YEAR TOGETHER AT ADVERTISING WEEK AND IT'S GREAT TO SEE YOU. I THINK THE YAHOO! STARBOARD SITUATION IS A YAHOO! STARBOARD SITUATION. WE'VE BEEN REALLY FOCUSED ON WHAT WE'RE DOING AT ADVERTISING WEEK. WE'RE ANNOUNCING A HUGE GLOBAL DEAL WITH PUBLICIS TODAY. I WOULDN'T COMMENT ON THAT SPECULATION. THAT'S TWO OTHER PARTIES' AND TWO OTHER PARTIES' RELATIONSHIP TO WORK OUT.

BOORSTIN: OK BEFORE WE GET TO THE PUBLICIS NEWS I JUST HAVE TO ASK YOU THOUGH, THIS IS NOT THE FIRST TIME SPECULATION HAS COME UP ABOUT THE POTENTIAL SYNERGIES OF A YAHOO! AND AOL MERGER. A POTENTIAL BILLION DOLLARS IN SYNERGIES DO YOU THINK IT'S TIME NOW TO BRING THESE TWO COMPANIES TOGETHER?

ARMSTRONG: I THINK THE INTERESTING THING IN THE INDUSTRY RIGHT NOW OVERALL IS YOU HAVE GIANT DYNAMICS HAPPENING. AND I THINK SCALE MATTERS A LOT AS PART OF THE REASON AT AOL. WE WENT TO NUMBER FOUR IN TERMS OF TRAFFIC IN THE U.S.THIS YEAR. BUMPED UP A SPOT. WE HAVE DONE REALLY WELL IN NEWS. WE'RE NUMBER ONE IN GLOBAL NEWS, TOP THREE IN VIDEO. TOP THREE IN PROGRAMATICS SO I THINK THOSE RUMORS SPECULATE BECAUSE PEOPLE THINK ABOUT SCALE A LOT IN THIS MARKETPLACE. THE REALITY IS AOL HAS TREMEMDOUS SCALE AND HAS ACTUALLY BEEN MOVING UP THE SCALE RANK. SO WE'RE MANIFEST DESTINY AND REALLY FOCUSED ON ONLY ON WHAT WE ARE DOING, OUR STRATEGY. AND WE HAVE BEEN REALLY SUCCESSFUL AT IT.

ANDREW ROSS SORKIN: I JUST WANTED TO KNOW AND I KNOW YOU DON'T WANT TO SPEAK TO IT, BUT TIM TO THE EXTENT YOU CAN, YOU'VE HAD CONVERSATIONS OVER THE YEARS WITH STARBOARD. THEY'RE NOT NEW TO YOU. HAVE YOU HAD CONVERSATIONS WITH THEM ABOUT THIS AT ALL?

ARMSTRONG: YOU KNOW, ANDREW, MY FOCUS HAS BEEN ON THE LARGEST SINGLE SHAREHOLDER AT AOL. WHILE OUR RELATIONSHIP WITH STARBOARD IN THE PAST HAS BEEN AROUND THE ALIGNMENT OF THE SHAREHOLDERS AND WE WENT THROUGH OUR OWN PROXY SITUATION AND HAD SUCCESS IN THAT FOR ALL OF THE SHAREHOLDERS AND ALL OF OUR EMPLOYEES. SO OUR FOCUS SINCE THEN HAS REALLY BEEN ABOUT DRIVING AOL'S STRATEGY. I THINK THE POINT WE'RE HERE TODAY TO TALK ABOUT TODAY IS PROGRAMATIC AND REALLY WHERE THE WORLD IS GOING. ADVERTISING IS A TRILLION-DOLLAR INDUSTRY. AOL IS IN THE FORE FRONT OF THAT. I HAVEN'T FOCUSED TOO MUCH ON YAHOO! STARBOARD BECAUSE WE HAVE REALLY BEEN GETTING READY FOR THIS WEEK BECAUSE IT IS A HUGE WEEK FOR US AND OUR CUSTOMERS.

SORKIN: CAN I ASK ONE TREND QUESTION IN TERMS OF BROADER CONSOLIDATION THE OTHER PIECE OF NEWS THAT CAME OUT THIS MORNING YOU'RE NOT INVOLVED SO MAYBE YOU CAN SPEAK TO IT. MASA SON'S SOFTBANK LOOKING TO BUY DREAMWORKS ANIMATION. WHAT DO YOU MAKE OF THAT IN THIS IDEA THAT PEOPLE ARE TRYING TO GET ON ONE PLATFORM? THAT SUGGESTS TO ME MAYBE THERE'S SOMETHING ELSE TO THINKING ABOUT HOW YOU THINK ABOUT AOL IN THE FUTURE.

ARMSTRONG: I SAW NIKESH LAST WEEK FROM SOFTBANK, HAD A GREAT CHAT WITH HIM. THE DREAMWORKS THING WAS NEWS. I SAW THE NEWS JUST LIKE YOU DID OVERALL IF IT IS REAL NEWS. BUT LOOK YOU KNOW CONTENT IS KING. YOU LOOK AT WHAT'S HAPPENING IN THE WORLD IN TERMS OF THE FOCUS. FOCUS WE'VE HAD AROUND BUILDING PROPERTIES LIKE HUFFINGTON POST AND TECH CRUNCH AND THOSE THINGS. AND THEN YOU LOOK AT THE FACT THAT EVERYBODY WANTS SCALE. THERE'S GOING TO BE GLOBAL PLATFORMS THE COMPANIES THAT DO A GREAT JOB ON GLOBAL PLATFORMS AND HAVE GREAT CONTENT ARE GOING TO WIN.

BOORSTIN: NOW, I WANT TO ASK YOU WITH THIS NEWS YOU'RE ANNOUNCING ON OUR AIR THIS MORNING. YOU'RE EXPANDING YOUR DEAL WITH PUBLICIS TO ALLOW THEM TO BUY BOTH DIGITAL ADS AND TRADITIONAL TV ADS THROUGH YOUR PLATFORM. WHAT'S THE NEWS?

ARMSTRONG: THE BIG NEWS HERE IS THAT PROGRAMATIC ADVERTISING ON THE INTERNET IS GROWING REALLY REALLY QUICKLY. OUR PROGRAMATIC IS GROWING AT OVER 100% THAT WE ANNOUNCED IN Q2. IT'S NOW STARTING TO GO INTO TV. SO THE SIMPLE WAY TO THINK ABOUT THIS IS ADVERTISING IS BECOMING AS EASY AS E-COMMERCE. IN THE WORLD WHERE HUNDREDS OF MILLIONS OF DOLLARS GETS TRADED OVER FAX MACHINES EVERYTHING IS GOING TOWARDS AN ECOMMERCE DRIVEN TYPE ADVERTISING WORLD. WE'RE THE FIRST COMPANY TO TIE THE INTERNET ADVERTISING TARGETING TOGETHER WITH LINEAR TV AND PUBLICIS MAURICE LEVY'S LEADERSHIP IN DIGITAL HAS BEEN TREMENDOUS. MAURICE IN NOW MOVING PUBLICIS INTO LINEAR TV FROM A PROGRAMATIC STANDPOINT AND WE'RE THE FIRST PARTNER THEY'RE GOING TO BE LAUNCHING WITH.

BOORSTIN: SO THE ANNOUNCEMENT TODAY WHAT'S THAT GOING TO MEAN FOR AOL'S BOTTOM LINE? HOW BIG OF A DEAL IS THAT?

ARMSTRONG: THE TV MARKET PLACE IN THE U.S. IS TENS AND TENS OF BILLIONS OF DOLLARS. IT'S HUNDREDS OF MILLIONS GLOBALLY. I BELIEVE THIS TRANSITION -- WE'VE GONE FROM ZERO TO HUNDREDS OF MILLIONS OF DOLLARS IN THE VIDEO LANDSCAPE ONLINE, I BELIEVE WE WILL GO TO HOPEFULLY HUNDREDS IF NOT BILLIONS OF DOLLARS IN THE FUTURE IN TV. I THINK THIS IS A LANDMARK WEEK FOR US THIS IS A LANDMARK ANNOUNCEMENT. WHILE ALL THIS OTHER NOISE IS GOING ON IN THE INDUSTRY, AOL IS SHOWING UP FIRST DAY OF AD WEEK WITH A SPECIFIC ANNOUNCEMENT. WHAT IS AT THE FOREFRONT OF WHERE THE WORLD IS GOING FOR ADVERTISING.

BOORSTIN: EXPANDING THAT DIGITAL BUYING INTO TELEVISION. THANKS FOR JOINING US WE ARE OUT OF TIME. TIM ARMSTRONG THANKS SO MUCH.

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