Oath aiming for up to $20 billion in annual revenues
In the first quarter, Verizon’s (VZ) Oath unit reported gross revenues of $1.9 billion, excluding the impact of its revenue recognition standard. Oath’s gross revenues declined sequentially by ~13.0% from the fourth quarter of 2017 levels of $2.2 billion due to seasonally lower display advertising performance.
Oath is Verizon’s digital media and advertising arm. It includes Yahoo and AOL properties, which Verizon acquired for ~$10.0 billion. Oath aims to generate $10.0 billion–$20.0 billion in annual revenues by 2020 from $7.0 billion in current annual revenues.
During the JPMorgan Global Technology, Media, and Communications Conference held on May 16, Matt Ellis, Verizon’s executive vice president and CFO, spoke about growth in the Oath unit.
Ellis stated, “As we jump off into ’19, that business should really be set up for strong growth at that point forward. But certainly still feel as excited as we did about the opportunity of bringing those assets together and combining it with the core Verizon business, and we think there’s significant upside.”
Verizon optimistic about digital media
With stiff competition in the traditional US wireless space, Verizon seeks to become a key digital advertising player similar to Facebook (FB) and Twitter (TWTR). Oath currently reaches an audience of ~1.0 billion people. Its goal is to double that audience to more than 2.0 billion people by 2020. Facebook has an audience of more than 2.1 billion, and Twitter’s global audience is ~330.0 million.
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