“With virtually no goodwill brand value, Oath’s overall value (assets and goodwill) is now worth half of what it was a few years ago,” CNN reported. It announced Monday that 10,400 employees had accepted buyout offers and would leave the company by June 2019. Under newly-appointed CEO Hans Vestberg, Verizon has been aggressively reviewing business units as part of a plan to save $10 billion by 2021 and focus on wireless technology. In an 8-K filing with the SEC on Tuesday, Verizon said that it was taking a 4.6 billion write-down on Oath, the media venture they launched in 2017. TechCrunch noted that the business has also been hit by a major data breach at Yahoo, while the shift of consumers to mobile apps and non-Oath properties has made the strategy of combining Yahoo with AOL “too little, too late.” NEW YORK (CelebrityAccess) Telecom giant Verizon conceded on Tuesday that its media brand Oath, which includes Yahoo and AOL, was effectively worth nothing. Login and start exploring all the free, organizational tools for your email. In October, Oath reported a nearly 7% drop in quarterly revenue. Take a trip into an upgraded, more organized inbox with Yahoo Mail. The company added that Oath “has also achieved lower than expected benefits” from the integration of Yahoo and AOL.Īs The Wrap reports, Verizon’s effort to take on major advertisers such as Facebook and Google has “largely been in vain,” with Oath accounting for less than 5% of U.S. “These pressures are expected to continue and have resulted in a loss of market positioning to our competitors in the digital advertising business.” Oath “has experienced increased competitive and market pressures throughout 2018 that have resulted in lower than expected revenues and earnings,” Verizon said. Verizons fourth quarter financials are going to have a pair of hefty charges due to an voluntary separation program where 10,400 employees left and a 4. I have full confidence that Yahoo will take off in its new home.As part of a major expansion into digital media, Verizon had acquired a number of legacy media brands in recent years to create Oath, including Yahoo for $4.5 billion in 2017 and AOL for $4.4 billion in 2015.īut according to the filing, a comprehensive five-year strategic planning review of Oath’s business prospects resulted in “unfavorable adjustments” in its financial projections. Verizon CEO Hans Vestberg, in announcing the pact, said that during the telco’s strategic review process for the media unit, “Apollo delivered the strongest vision and strategy for the next phase of Verizon Media. In addition, the division’s business-to-business Media Platform group provides streaming, content delivery, security and cloud compute services for broadcasters and other customers. Those include Yahoo (including Yahoo News, Yahoo Finance, Yahoo Sports, Yahoo Entertainment), AOL, tech-news sites TechCrunch and Engadget, content studio Ryot, college-sports site Rivals, women’s storytelling brand Makers, Autoblog, and mobile apps analytics provider Flurry. The deal, subject to certain closing conditions, is expected to close in the second half of 2021.Īcross its brands, Verizon Media says, it draws nearly 900 million monthly active users worldwide. Under the terms of the agreement with Apollo, Verizon will receive $4.25 billion in cash and preferred stock in the new Yahoo worth $750 million, in addition to retaining a 10% stake in the company. That included sales of Tumblr, Flickr, Moviefone, and HuffPost - which is now part of BuzzFeed. Under Gowrappan, the former Alibaba exec who assumed leadership of Verizon Media in the fall of 2018 after the exit of ex-AOL CEO Tim Armstrong, the telco sold off some of the AOL/Yahoo assets to focus on news, sports, finance and lifestyle content and utilities like Yahoo Mail. After a massive write-down on the assets in 2018 and several rounds of layoffs, Verizon Media in recent quarters appears to have finally stabilized: Revenue at Verizon Media rose 10.4% in the first quarter of 2021, to $1.9 billion, fueled by a 26% rise in ad revenue. The telco bought AOL for $4.4 billion in 2015 and closed a $4.5 billion deal for Yahoo in 2017.īut Verizon Media, as the group was named, continued to struggle as the hoped-for revenue growth failed to materialize. Verizon spent nearly $10 billion to buy AOL and Yahoo - once among the internet’s biggest and most powerful companies - on the theory that under one roof they would more efficiently reach large audiences and vie with Google and Facebook for digital ad dollars.
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