A company with a lot of free cash flow (read, a telco) and an aggressive plan for ad-subsidized services, could have run rampant. Since Verizon did its deals, we’ve seen revolutionary changes in the industry, including some economic/political situations that have put the very competitors that threatened Yahoo and AOL in jeopardy.
The second real lesson is that separating new businesses into separate subsidiaries doesn’t immunize them against telco-think. The lack of OTT knowledge led to a decision to buy some companies that needed major rehab just to stay alive, when Verizon apparently believed it was buying somebody who had a real future. I don’t think Verizon is unique in that failing I don’t think any telecom out there understands OTT even though they’ve been moaning about disintermediation for decades. They literally didn’t know a good deal when they saw it, or a bad one. The first real lesson of this is that Verizon didn’t know anything whatsoever about the OTT space. Let’s then try not to make shallow things even shallower let’s learn some real lessons. As far as the Street is concerned, “buy on the rumor sell on the news” (or vice versa) has been the adage all along stocks tend to move based on advanced predictions not current steps. Did Verizon expect something other than competition when they bought into a space to compete there? Did they miss that the companies they bought were not only not incumbents, but had long passed their prime? Yes, the deal was shaky from the first and in fact got a bit shakier as discussions progressed. Obviously the commentary is a bit shallow. Wall Street thought the whole idea was stupid long ago, and as a result have rewarded Verizon with a bit of an uptick on their stock. Billboard says that the Verizon units lacked the scale of Google or Facebook. The Wrap says the whole idea was shaky from the start. According to the Financial Times, Verizon is “dialing back” its media aspirations to focus on core telecom. Verizon says, essentially, that Oath experienced an unexpectedly competitive environment. Let’s look at the explanations that various pundits have given. We still have to ask “Why?” because the failure could signal some real challenges for operators down the line. I’d bet that the fact that the two deals failed to return value is no surprise to most, either. The decline is largely the drop in brand (in financial terms “good will”) value, no surprise since most of us never heard of Oath. The company is taking a massive $4.6 billion write-down on its Oath media unit, the repository for its AOL and Yahoo units, admitting that the residual value is only $200 million. Verizon has admitted that its purchases of Yahoo and AOL have resulted in…nothing much. Important Site Policies and a Note to Skeptics!.Operator Services and Profits in the Cloud Era.What’s the Missing Ingredient in Open-Model Networking?.The Architecture for a Separate Control Plane in Networks.The unit still has about $5 billion of assets remaining. The revision of the Oath division’s accounting leaves its goodwill balance - a measure of the intangible value of an acquisition - at about $200 million, Verizon said in a filing Tuesday. Though the bet hasn’t paid off, it at least stumbled on a smaller scale. Rather than attempt a megadeal like AT&T Inc.’s $85 billion acquisition of Time Warner Inc., Verizon spent only about $9.5 billion in the last three years buying fading web giants. The episode offered a silver lining for investors. She likened the write-down to “ripping off the Oath Band-Aid.” “The hype of Oath has been over for some time,” Wells Fargo analyst Jennifer Fritzsche said in a note Tuesday. The move will erase almost half the value of the division it had been calling Oath, which houses AOL, Yahoo, and other businesses like the Huffington Post. The wireless carrier slashed the value of its AOL and Yahoo acquisitions by $4.6 billion, an acknowledgment that tough competition for digital advertising is leading to shortfalls in revenue and profit. is conceding defeat in its crusade to turn a patchwork of dot-com-era businesses into a thriving online operation.
0 kommentar(er)
