Verizon Buys Yahoo In $4.8 Billion Attempt To Bore The Internet To Death

from the hip-to-be-square dept

Remember when Yahoo rejected a $44.6 billion offer by Microsoft? Good times. After months of redundant rumors about the bidding process, Verizon has confirmed that it has acquired Yahoo in a $4.8 billion all cash deal. According to Verizon's press announcement, the acquisition of Yahoo's stumbling empire will position Verizon as a superpower in the new media age, helping the formerly stodgy telco in its pivot toward slinging ads at Millennials. As you might expect, the press release trots out AOL boss Tim Armstrong to sell a dull deal he claims will finally let poor Yahoo shine:
"We have enormous respect for what Yahoo has accomplished: this transaction is about unleashing Yahoo’s full potential, building upon our collective synergies, and strengthening and accelerating that growth. Combining Verizon, AOL and Yahoo will create a new powerful competitive rival in mobile media, and an open, scaled alternative offering for advertisers and publishers."
Verizon executives have acquired Yahoo and AOL in the belief they can pivot from a government-pampered telco mono/duopoly to a Facebook and Google-esque advertising juggernaut. And while there is little doubt that the advertising technology acquired from these deals will be useful in Verizon's quest to monetize the company's 140 million mobile subscribers, there's been little to no evidence that Verizon is actually competent enough to execute its own game plan.

Verizon's jumping into the media and advertising game because mobile and fixed broadband subscriber growth is slowing to a point where it's incredibly profitable, but just not profitable enough for Wall Street. And if you've followed the net neutrality fights, you're probably aware that most telcos believe they're absolutely entitled to a larger share of ad revenues -- simply because they built the networks these services run over. The problem (for these telecom companies) is that most of them have spent so long as government-pampered duopolies focusing on lobbying and turf protection, innovation and competition are alien concepts.

As a result, pivoting from stodgy telco to hip Millennial-focused ad empire has had an almost comical learning curve for Verizon execs. You might recall it began with Verizon launching its own tech blog dubbed Sugarstring, where its reporters weren't allowed to even mention subjects like net neutrality or surveillance. As that effort was busy imploding, Verizon's advertising arm was busted covertly modifying wireless user data packets to track consumer behavior around the Internet. This is of course all while Verizon was busy trying to deliver a killing blow to net neutrality; not exactly endearing itself to its target audience.

After several years of stumbling, Verizon launched a new, hip streaming video service Go90, which by most measurements has been a disappointment, despite Verizon's anti-competitive practice of zero rating the service. Now we're to believe that the combination of multiple, marginal 90s brands will somehow be the missing ingredient needed to transform Verizon into a media and advertising god, despite the fact Verizon has shown minimal competence and an aggressive, active disdain for the users it's trying to target. Good luck with that, Verizon.

Filed Under: advertising, mergers, search
Companies: aol, verizon, yahoo


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  1. icon
    Tobias Harms (profile), 25 Jul 2016 @ 11:24am

    The market speak is strong in this one...

    ... I got as far as "collective synergies" before my eyes glazed over...

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