Verizon's Media Failure Is Complete As Company Eyes AOL/Yahoo Sale

from the bumblin'-and-stumblin' dept

Back in 2014, Verizon decided it wanted to get into the media business. So it launched a website dubbed “Sugarstring.” It didn’t go very well. The website immediately gained attention for the fact that Verizon informed new journalist hires that they couldn’t write about surveillance or net neutrality, two subjects Verizon is intimately involved in. The backlash was immediate, employees realized it was a shitshow and headed for the exits, and the whole thing was quickly shut down. But it was a good indication of what was to come.

Years later, Verizon moved on to an equally ill-fated effort, the acquisitions of both AOL (bought for $4.4 billion in 2015) and Yahoo (bought for $4.48 billion in 2017). Apparently, the executive brain trust at Verizon thought it would be a great idea to buy two sharply declining 90’s media brands and mush them together, hoping this would allow them to magically elbow in on the Google ad revenues they’d coveted for so long. Of course that didn’t go particularly well either.

There was the huge Yahoo hack, a massive privacy scandal where Verizon was busted modifying wireless data packets to track them around the internet without telling them (whoops!), and then of course the face plant by Go90, Verizon’s attempt to rebrand itself as a sexy, Millennial-friendly streaming video service. Despite making a great stink about rebranding its AOL/Yahoo media and ad empire “Oath,” by late 2018 Verizon was forced to acknowledge the whole thing was effectively worthless.

In 2019, Verizon wound up selling Tumblr to WordPress owner Automattic at a massive loss after a rocky ownership stretch. Last year it offloaded the Huffington Post. And this week, somebody leaked word to the press that Verizon was finally considering selling the whole mess, now creatively dubbed “Verizon Media Group”:

“Verizon Communications Inc. is considering selling its media division, according to people familiar with the matter, as the telecommunications giant seeks to unload once high-flying dot-com brands such as Yahoo! and AOL. The company is talking to Apollo Global Management Inc. about a deal, they said. It couldn?t immediately be learned how a deal would be structured or if other suitors may emerge.

While whoever leaked word of the sale suggests the deal could come in around $5 billion, given the history of these assets I’d say it’s probably a good bet the final sale figure could be dramatically less. Even calling Yahoo and AOL “once high-flying dot-com brands” seems generous in the TikTok, Facebook era. Verizon will now slink back to its core competences: running and building networks, and lobbying the federal government to prevent broadband competition.

As we’ve long noted, companies like AT&T and Verizon have spent the better part of a generation as government-pampered, natural monopolies. As such, creativity, competition, innovation, and adaptation are alien constructs. They’re just not built for the kind of competition you see in markets like adtech or short-form online video. And when they do try to compete, that usually involves throwing money at often mindless acquisitions (see AT&T’s $200 billion TV sector face plant). But despite billions of dollars, an ocean of regulatory favors, and endless hype, the end result has been a massive parade of stumbles.

Filed Under: , ,
Companies: aol, verizon, yahoo

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “Verizon's Media Failure Is Complete As Company Eyes AOL/Yahoo Sale”

Subscribe: RSS Leave a comment
23 Comments
Samuel Abram (profile) says:

The final paragraph

In regards to this:

As we’ve long noted, companies like AT&T and Verizon have spent the better part of a generation as government-pampered, natural monopolies. As such, creativity, competition, innovation, and adaptation are alien constructs. They’re just not built for the kind of competition you see in markets like adtech or short-form online video. And when they do try to compete, that usually involves throwing money at often mindless acquisitions (see AT&T’s $200 billion TV sector face plant). But despite billions of dollars, an ocean of regulatory favors, and endless hype, the end result has been a massive parade of stumbles.

I would say that I do like HBO Max. However, the user experience on their iPhone app is nowhere near as good as Netflix or even a Disney+. Here are some examples of what I mean:

  1. When there’s no WiFi or scant access thereto and I want to watch a downloaded video on HBO Max, I would get an error box constantly popping up and down saying "cannot connect to wireless network" when I just want to watch the fucking episode or movie. I never have that problem with Netflix or Disney+.
  2. Whenever a movie is shown in a 2.39:1 aspect ratio, the picture is always letterboxed and pillarboxed on my iPhone. When I offered feedback to HBOMax suggesting they offer a way to zoom in so the picture could take up the whole screen, they replied with what was in effect was that they misunderstood the problem:

Thank you for your comments regarding aspect ratios.

Please note, HBO does not alter the aspect ratio of any videos received from studios and other content providers. Based on several factors, including customer feedback, we will never clip or stretch a video. We may add black bars around the video so that the image fills an HD screen.
With the 4K movies some directors have opted to present in 4:3 ratio to ensure best quality as well Apple products may show in that pillarboxed setting.

Can you please reply with the movie or show that is streaming in 4:3 aspect ratio to better assist you.

which I would regard as terrible customer service, because I have no issues with how HBO Max handles the 4:3 aspect ratio but how they handle the 2.39:1 aspect ratio. I’ll provide the letter to which they were replying in the next comment.

Samuel Abram (profile) says:

Re: HBO Max's terrible customer service

Here is the feedback they replied to:

I’ll respond to each individual question, one by one:

> To better assist, please respond with the following information:

> The devices you’re experiencing difficulties with (model numbers would be especially helpful)

The Model # is "MQAV2LL/A”. This is the model according to Everymac.com: https://everymac.com/systems/apple/iphone/specs/apple-iphone-x-att-t-mobile-global-a1901-specs.html . That is, the model is an iPhone X.

> Are other devices giving you the same trouble?

No, this issue is solely isolated to the iOS app for my iPhone X. Oh, and just so you know, I tested the issue on the HBO Max app on the 7th Gen iPad (which is model # “MW752LL/A”) and there was no pillarboxing for Labyrinth, another movie that has the 2.39:1 aspect ratio, so this is more or less an issue that has to do with the 2.39:1 aspect ratio of the iPhone X and the HBO Max iOS app’s inability to conform to those specifications (which could be easily solved by allowing the user to zoom in, as I see it).

> I recommend giving this a try if you haven’t already.
A screenshot or picture of the error.

I tried to take a screen-capture of the HBO Max problem, but unfortunately, the picture turned all black (probably due to the copy protection of the app). That being said, I was able to record a small clip of my iPhone X playing the HBO Max app with the 2.39:1 movies being both letterboxed and pillarboxed, and I have attached the video file in the email.

> We also suggest uninstalling HBO Max, restarting the device, then reinstalling the HBO Max application on that device to see if that resolves the error.

I tried that but it didn’t solve the problem at all.

I hope I provided you with more information.

Thank you,

Samuel Abram

TheResidentSkeptic (profile) says:

Trying to repeat history

"… Apparently, the executive brain trust at Verizon thought it would be a great idea to buy two sharply declining 90’s media brands …"

You forget the history of General Telephone and Electronics… they were formed by buying up a ton of bankrupt local telco’s and fixing up the profit generating parts of them. They still figure that is a viable business model. Just didn’t work this time.. but wait till next time! It will be awesome!!!
NOT.

Anonymous Coward says:

flaw

|| As we’ve long noted, companies like AT&T and Verizon have spent the better part of a generation as government-pampered, natural monopolies. ||

so multiple phone companies, ISP’s, and content providers are natural monopolies?
The ‘mono’ in monopoly means only ‘one’ seller exists for all buyers.

Why does a democratic government support and pamper monopolies that harm the public?

Where is the flaw in American system of government that prompts this long term adverse situation?

Scary Devil Monastery (profile) says:

Re: flaw

in addition to nasch’s suggestion there’s an add-on; The US is extremely vulnerable to regulatory capture because so much of its political system relies on campaign financing provided by private interests. Seats in senate and the house of representatives are literally bought and sold.

And thus the head of any government regulatory body will more often than not be one put there by a politician who owes their job to the private entities with a vested interest in how that regulatory body operates.

Anonymous Coward says:

Even calling Yahoo and AOL "once high-flying dot-com brands" seems generous in the TikTok, Facebook era.

Not really. Both brands really were huge, "once". Long before Verizon bought them (2017!), of course—Yahoo’s stock peaked in 2000, and lost 93% of that value when the dot-com bubble burst (apparently, they remained quite popular in Japan). Verizon was really only a decade or two behind the times, which is to be expected given the way they run their network.

sumgai (profile) says:

Re: Re: Re:

I’m pretty sure that being able to turn a grand into a hundred grand will earn you a Master’s degree in any business school. My investments in the stock market should bring me so much ROI….

But your observation about voters, that was spot on. So here’s an idea. Question: What would it take to wake up voters, and make them start thinking about their choices? My guess would be term limits.

ECA (profile) says:

We have a corp

That thinks taking over OLDER Failing companies, can do them good, insted of creating their OWN, up to date, up to Format, Upto everything NOW.
Anyone want to go back to the age of Lets find the pollution from the last 100 years? When the Corps didnt give a hoot about Pollution, and where it went? not understanding that killing people over their OWN lift time, 100 years later? isnt a good thing.
Doint some things the OLDEST way possible, and destroying the lands and living places Isnt a good thing, and 1 reason that sending OUR CRAP to other countries IS A BAD THING ALSO.

Anonymous Coward says:

So verizons plan to "somehow" profit by setting up THOUSANDS of offshore scam call centre shell companies aimed at AOLs pretty much age 65+ demographic tanked….

How the fluck did they think buying AOL would be profitable? they’d have to scam tens of thousands of dollars from every single remaining customer.

Add Your Comment

Your email address will not be published.

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...
Loading...