Verizon acquires Yahoo’s core properties
Last year, Verizon (VZ) completed its $4.5 billion acquisition of Yahoo’s core Internet properties after 11 long months of uncertainty, two data breaches, and extensive negotiations. Yahoo assets were combined with AOL’s, which were acquired by Verizon for $4.4 billion in 2015 to create a new online media and advertising subsidiary called Oath.
In 4Q17, Oath generated $2.2 billion in consolidated total revenue, an increase of ~10% sequentially. This growth was primarily driven by higher advertising spending during the holiday season, according to the company. Agreements with sports organizations such as the NFL (National Football League) and NBA (National Basketball Association) could be a positive for Oath’s business, driving viewership and desirable mobile content.
Oath properties position Verizon to expand its addressable market from millions of wireless and wireline customers to billions of global content consumers. Additionally, Oath anticipates growing its annual revenue from $7.0 billion to $10.0 billion–$20.0 billion by 2020.
Verizon optimistic about digital media
AOL and Yahoo assets complement each other, with Yahoo adding tremendous technical capability and AOL offering great sales and ad-tech capability. With intense competition in the traditional US wireless market, Verizon is striving to be a key digital advertising player like Facebook (FB) and Alphabet (GOOGL).
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