Verizon is booking a $4.5B accounting charge related to its Oath media business, "conceding that the company’s bet on high-profile internet properties hasn’t worked out as planned," according to Krouse & Maidenberg of the WALL STREET JOURNAL. Verizon spent more than $9B to "create the Oath business" by acquiring AOL in '15 and then Yahoo in '17. Execs are "exploring ways to supplement weaker-than-expected advertising revenue and potentially wind down some AOL or Yahoo brands" (WALL STREET JOURNAL, 12/12). CNN.com's Jordan Valinksy noted Oath's brand value is now just $200M, which is a "stunning decrease in value" since it formed in '17 (CNN.com, 12/11). NBCNEWS.com's Alex Johnson writes under the header, "Verizon Signals Its Yahoo And AOL Divisions Are Almost Worthless." Verizon gave "no indication of its plans for AOL, Yahoo, TechCrunch, the Huffington Post and the dozen or so other businesses collected under the Oath umbrella, which also include Engadget, Tumblr, Rivals Sports, the Makers video platform and several portals in partnership with Microsoft." (NBCNEWS.com, 12/12). RECODE's Peter Kafka wrote the playbook for Oath from here on out "calls for a series of staff cuts and asset sales, followed by more writedowns, followed by more cuts." This one "contains multiple teachable moments." Kafka: "Just wishing that there was an alternative to the Facebook/Google advertising duopoly doesn’t make it so" (RECODE.net, 12/11).
WRITING WAS ON THE WALL: CNBC’s David Faber wondered whether anyone did “really anticipate it was going to go well when” Verizon acquired AOL and Yahoo, “two depressed properties.” Faber said of Oath, “We always wondered about their ability to compete, we always wondered whether they would successfully be able to carve out true market-share position and clearly they’re having a difficult time of it” (“Squawk on the Street,” CNBC, 12/11).
