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How Verizon’s Media Business Performed in 1Q18

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Verizon’s Oath business

In 1Q18, Verizon’s (VZ) digital media and advertising subsidiary, Oath, posted gross revenues of $1.9 billion—excluding the impact of the revenue recognition standard. As expected, Oath’s gross revenues decreased sequentially by 13% from fourth-quarter 2017 levels of $2.2 billion due to seasonally lower display advertising performance.

Verizon’s Oath business represents future growth plans, including advertising aspirations. Oath comprises the acquisition of Yahoo’s core Internet business for $4.5 billion in June 2017 along with AOL, purchased for $4.4 billion in 2015. Oath also includes 5G technology.

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Verizon aims to boost digital media

With competition intensifying in the traditional US wireless space, Verizon seeks to become a key digital advertising player such as industry leaders Facebook (FB) and Alphabet (GOOGL). Verizon is trying to focus on the potential of its wide AOL and Yahoo user base to grow its advertising platform across its websites and apps, as well as its streaming services.

In December 2017, Verizon and the National Football League (or NFL) expanded their partnership to distribute mobile access to live games. The new Verizon-NFL deal, which is expected to run for five years, is slated to make NFL games accessible to all mobile subscribers in the United States—regardless of the network. The expanded partnership will, therefore, mean that customers of AT&T (T), T-Mobile (TMUS), and Sprint will all be able to enjoy free NFL games on their handsets.

Concerns over data privacy

However, we’ve seen rising concerns among consumers over data privacy after Facebook’s Cambridge Analytics scandal. The concerns have caused both Google and Facebook to pull back and re-examine their services. Verizon has also notified its users about scanning their emails under the company’s updated privacy policy for its AOL and Yahoo assets.

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