Warning: "continue" targeting switch is equivalent to "break". Did you mean to use "continue 2"? in /nfs/c12/h04/mnt/223320/domains/digitalgabe.com/html/wp-includes/pomo/plural-forms.php on line 210
Verizon’s Oath Problem – Digital Gabe
Digital Gabe
Cutting Edge Commentary On All Things Media

Verizon’s Oath Problem

0 1,001

Verizon’s struggle to find the right strategy to leverage its ad business came to a head on Friday, as reports started coming out about Tim Armstrong’s eminent departure from the company.  In 2016 Verizon completed its acquisition of AOL and Yahoo, and put Armstrong at the helm of the combined entity they rebranded as Oath.  The original vision was a fully integrated platform in which Verizon’s 116M subscribers’ data could be ingested into Oath’s digital media operations, which would allow them to compete with the likes of Google and Facebook.  Over the last two years Verizon and Oath have found out that executing on this plan has been harder than anticipated.

The biggest challenge is that only about 30% of Verizon’s customers have detailed enough data profiles to match with Oath, leaving 70% of their potential scale on the sidelines.  The other problem is Verizon’s skittishness about deluging its customers with Oath-sold ads.  Right now Oath only makes up 9% of Verizon’s $44B annual revenue, so there’s concern about hurting the mothership’s core business.  Based on these realities Verizon has decided to integrate Oath into its primary org structure instead of running it as a separate business.  That decision apparently rubbed Oath CEO Tim Armstrong the wrong way, which precipitated the conversations about his departure.

Beyond Armstrong’s fate, there are still hard questions about what Verizon can do (or is willing to do), to make it’s Oath investment pay off.  More to come on this story, I’m sure.


Subscribe to the newsletter