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Failures

by Karl Bode


Filed Under:
advertising, internet, portals, tim armstrong

Companies:
aol, oath, verizon, yahoo



Verizon's Pivot From Stodgy Old Telco To Sexy Millennial Ad Brand Isn't Going So Well

from the you're-not-built-for-this dept

We've noted for some time now how Verizon desperately wants to pivot from dull old broadband provider to sexy, Millennial-focused video advertising juggernaut. To accomplish this task, Verizon acquired both Yahoo and AOL, smushed them together, then hoped this would be enough to compete with the likes of Google and Facebook. The effort distracted the company from upgrading or repairing much of its fixed-line broadband footprint, since investing in networks isn't profitable enough, quickly enough, for many on Wall Street.

But Verizon's pivot hasn't been going so well. The company's Go90 video platform, which was supposed to be the cornerstone of the company's effort, recently fell flat on its face after Verizon spent $1.2 billion on the effort. And the company's Oath ad network, the combination of AOL and Yahoo, hasn't been doing much better, with Tim Armstrong (formerly of AOL) now heading for the exit (warning: annoying paywall):

"Mr. Armstrong, who came to Verizon in 2015 when it acquired AOL and helped steer its purchase of Yahoo two years later, had tried to combine the two internet companies to challenge Google and Facebook Inc. in digital advertising. But those efforts so far have failed to generate much growth or make the unit, called Oath, more than a side note in the wireless giant’s earnings."

Everyone (including Verizon) tends to forget that Verizon usually fails when it wanders outside of its core competencies (read: running networks and lobbying to kill consumer protections and hinder competitive threats). From the company's arguably terrible VCAST services to its failed app store, Verizon has long engaged in "me too" efforts that don't last because they're simply not good. And they're generally not good because, as a government-pampered telecom monopoly, Verizon simply isn't good at innovation, creativity, competition, disruption pr actually listening to your users. They're alien concepts to most Verizon executives.

The company's failed streaming partnership with RedBox was another such example, and who can forget the company's attempt to launch a news website dubbed Sugarstring that collapsed in embarrassment after critics pointed out Verizon tried to ban writers from talking about net neutrality or surveillance.

Ironically though, part of the reason given for Verizon's problems getting Oath off the ground (at least according to the Wall Street Journal's sources) is that the company wasn't willing to be snoopy enough:

"Verizon and Oath executives, however, have disagreed over what some employees within the digital ad unit see as an overly conservative approach to using wireless subscriber data to boost Oath’s advertising revenue, people familiar with those discussions say.

Senior executives within Verizon are wary of potentially alienating lucrative wireless customers in the name of adding incremental advertising revenue, these people said. Oath contributed less than $4 billion in revenue during the first half of the year, compared with the wireless business’s $44 billion.

Verizon agreed to share with Oath anonymous information on subscribers’ age, gender, phone language, and data plan size, for example. But these people say the carrier refused to share information on the apps customers used and their web browsing activity unless users explicitly opted in.

Verizon, you'll recall, was one of the key players responsible for killing FCC broadband privacy rules last year. It also faced a major privacy scandal after it was found the company was covertly modifying user wireless packets to track users around the internet without telling them or providing working opt out tools. It took security researchers two years to even discover this was happening, and another six months of public shaming before Verizon made it possible to opt out.

Gun shy from that experience, and wary of courting additional scandal as it rushed to kill consumer oversight (both on the national and state level), Verizon subsequently made Oath's snoopiest systems opt in. And the result pretty clearly highlights why ISPs and marketing folks hate the entire opt in paradigm:

"Given the choice, most of Verizon's 116.5 million wireless subscribers decided not to take the deal. Just 10 million of them have opted into the data-sharing program, known as Verizon Selects, according to the Journal."

Again, it's pretty ironic that Verizon only went the opt in route because it was wary of courting additional scandal after it was caught spying on all of its wireless users without its permission. But it really also can't be over-stated at how terrible government-pampered monopolies are at actually building innovative and competitive products. You'd think that eventually, Verizon would realize its best bet lies in doing what it's good at, be it running wireless networks, or lobbying the government to screw over competitors and consumers.


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  • icon
    Stephen T. Stone (profile), 10 Sep 2018 @ 6:20am

    You'd think that eventually, Verizon would realize its best bet lies in doing what it's good at

    Yeah, but that only gets Verizon some of the money, and the company’s higher-ups want all the money.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 10 Sep 2018 @ 1:27pm

      Re:

      >You'd think that eventually, Verizon would realize its best bet lies in doing what it's good at

      And that would be ... what? Customer service?

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 10 Sep 2018 @ 6:26am

    Verizon's corporate strategy is literally just the "How Do You Do, Fellow Kids?" meme come to life.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 10 Sep 2018 @ 6:46am

    >had tried to combine the two internet companies to challenge Google and Facebook Inc. in digital advertising.

    That is the wrong approach, as what they have to do is to challenge them as a search engine and social media site, and then the advertisers will come calling.

    reply to this | link to this | view in chronology ]

    • identicon
      michael, 10 Sep 2018 @ 12:23pm

      Re:

      They could just focus on what Yahoo does well: Flickr could once again be a leader for photography (including stock photography, and they could add a better social experience), and now that Google Finance is truly terrible Yahoo Finance could step up. In fact, the entire field of financial journalism could use some shake-up.

      But they don't seem to care about actually succeeding.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 10 Sep 2018 @ 2:10pm

        Re: Re:

        Nah, they'll run to their mummies at Congress whining 'google hit me!'

        Flickr could be big. But they just don't care. A year ago they've changed their API and suddenly I was unable to upload my pictures from digikam any more. So I swiched to piwigo, and didn't look back.

        reply to this | link to this | view in chronology ]

      • identicon
        Nobody, 10 Sep 2018 @ 7:54pm

        Re: Re:

        Flickr was sold earlier this year

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 10 Sep 2018 @ 7:26am

    Forgot to include the failed cloud acquisition of Terremark and the slowly decaying remnant of the security company CyberTrust.

    reply to this | link to this | view in chronology ]

  • identicon
    Pixelation, 10 Sep 2018 @ 7:33am

    "Verizon acquired both Yahoo and AOL"

    And I wonder why the millennials aren't interested...

    reply to this | link to this | view in chronology ]

    • icon
      Stephen T. Stone (profile), 10 Sep 2018 @ 7:37am

      Re:

      I’m surprised they haven’t gone for MySpace, LiveJournal, and Napster yet.

      reply to this | link to this | view in chronology ]

    • icon
      ShadowNinja (profile), 10 Sep 2018 @ 8:37am

      Re:

      I bet Gen Z hasn't even heard of either of these websites because of how irrelevant they are.

      If I was born 10 years later I know I wouldn't have a clue what either of these sites are if I heard their name.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 10 Sep 2018 @ 7:58am

    Can you spam me now?

    reply to this | link to this | view in chronology ]

  • icon
    Ryunosuke (profile), 10 Sep 2018 @ 8:02am

    so how is that "light touch" regulation handling innovation?

    *Reads article*

    oooohh so it seems that light touch regulation in fact, kills innovation... who knew?

    reply to this | link to this | view in chronology ]

  • This comment has been flagged by the community. Click here to show it
    identicon
    ATT of the blue, 10 Sep 2018 @ 8:29am

    Once again T E C H D I R T MOCKS another NOT-GOOG corporation.

    How dare you, Masnick!

    reply to this | link to this | view in chronology ]

    • identicon
      TripMN, 10 Sep 2018 @ 11:24am

      Re: Once again T E C H D I R T MOCKS another NOT-GOOG corporation.

      Can I vote to unflag something? This is quality satire that is being hidden.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 10 Sep 2018 @ 7:10pm

        Re: Re: Once again T E C H D I R T MOCKS another NOT-GOOG corporation.

        Yeah.. whats up with all the fagged comments here? You pussies. Plus it should take at least a 100 falgs to get comment hidden.

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 10 Sep 2018 @ 8:50am

    No picture of the old guy wearing the Music Band shirt? Where is that from anyway?

    reply to this | link to this | view in chronology ]

  • identicon
    AricTheRed, 10 Sep 2018 @ 10:08am

    You'd think that eventually, Verizon would realize its best bet lies in doing what it's good at, Lying about running wireless networks, or Lying to the government to screw over competitors and consumers.

    FTFY-AricTheRed

    reply to this | link to this | view in chronology ]

  • icon
    ECA (profile), 10 Sep 2018 @ 12:06pm

    HOW to fail...in 1 easy lesson

    This is funny.
    Think of all the services and such that Google has running at the same time, And SEE how they are doing them..

    MOST sections are mostly independent. And most of the money invested into them, comes from the Profits of the other, THAT WORK. Profits that would only be PAID out to the top employees..Its like investing INTO YOUR OWN COMPANY..(GET A HINT)
    If an idea or Concept is going to Cost to much IN THE END, then you drop it. You AIM for the middle price points, NOT THE TOP. If only the TOP 10% can afford something...you have LOSt the bottom 90%.
    Google has expanded into so many directions and parts of the internet, that its like a WEED. It takes the little it finds and USES IT.. It dont sit there saying, OH! we can charge abit more, Oh! we can charge abit more.. over and over. HOW many of the services COST YOU, money?? NOT MANY.. and a small company cna jump into it also, and create their OWN site and MAKE MONEY ALSO.. and NOT be Robbed by google changing PRICES YEARLY..

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 10 Sep 2018 @ 7:05pm

    Verizon once charged my cell phone account $260+ for a friend's five minute phone call to the carribean.. I threw that phone into the inter coastal.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 11 Sep 2018 @ 1:49am

    I don't think they are particularly good at running networks, either. Maybe in wireless tbey are, wouldn't know.

    reply to this | link to this | view in chronology ]

  • icon
    pjcamp (profile), 11 Sep 2018 @ 11:04am

    Verizon

    The Samsung of broadband.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 22 Sep 2018 @ 7:05am

    cme_Subscriber_Agreement.pdf

    reply to this | link to this | view in chronology ]


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