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.

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Filed Under: advertising, failures, media
Companies: aol, verizon, yahoo


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  1. icon
    Samuel Abram (profile), 30 Apr 2021 @ 5:17am

    Re: 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.

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

  2. icon
    Samuel Abram (profile), 30 Apr 2021 @ 5:21am

    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

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

  3. icon
    TheResidentSkeptic (profile), 30 Apr 2021 @ 7:17am

    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.

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

  4. icon
    Koby (profile), 30 Apr 2021 @ 7:18am

    Cursed Asset

    AOL is approaching a kind of Hope Diamond cursed status. I can't believe anyone would want to pay billions for it.

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

  5. icon
    rattran (profile), 30 Apr 2021 @ 7:34am

    Re: Cursed Asset

    They said the deal came in at $5 Billion. Maybe that's what it will cost Verizon for someone to take AoL/Yahoo/Oath off their hands.

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

  6. identicon
    Anonymous Coward, 30 Apr 2021 @ 7:47am

    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?

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

  7. identicon
    Anonymous Coward, 30 Apr 2021 @ 8:31am

    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

    In the computer industry this is called "harnessing dead horses together for more efficient flogging."

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

  8. identicon
    Anonymous Coward, 30 Apr 2021 @ 8:51am

    They're just not built for the kind of competition

    They haven't had any real competition for decades. They don't know how to function in a market where they aren't entrenched, legislatively protected and subsidized.

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

  9. icon
    Thad (profile), 30 Apr 2021 @ 8:57am

    Re: Trying to repeat history

    Haha, "Not." Like Wayne's World. I remember Wayne's World.

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

  10. icon
    Thad (profile), 30 Apr 2021 @ 8:58am

    I'm still mad about ComicsAlliance getting shut down.

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

  11. identicon
    Anonymous Coward, 30 Apr 2021 @ 9:07am

    Re: Re: Trying to repeat history

    So you’re saying Verizon looked at Yahoo and AOL and “Dreamweaver” started playing?

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

  12. icon
    That Anonymous Coward (profile), 30 Apr 2021 @ 10:00am

    I think if I look in the couch I can scrape up maybe 65 cents to purchase the bundle.
    Then I can change the AOL you've got mail notification to Bobcat screaming.... then drive a stake through the heart of the beast.

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

  13. identicon
    Anonymous Coward, 30 Apr 2021 @ 10:43am

    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.

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

  14. icon
    sumgai (profile), 30 Apr 2021 @ 11:45am

    ... slink back to its core incompetences: running and building networks

    T, FTFY

    ... and lobbying the federal government to prevent broadband competition.

    Yes, I have to give them credit for this competency, they're at the Master level in this game. Sad that I have to say that.

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

  15. icon
    ECA (profile), 30 Apr 2021 @ 11:56am

    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.

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

  16. identicon
    Anonymous Coward, 30 Apr 2021 @ 3:43pm

    "Verizon will now slink back to its core competences: running and building networks, and lobbying the federal government to prevent broadband competition. "

    Not listed in order of level of effort.

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

  17. identicon
    Anonymous Coward, 30 Apr 2021 @ 6:21pm

    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.

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

  18. icon
    That Anonymous Coward (profile), 30 Apr 2021 @ 6:56pm

    Re:

    Its not a master level, our elected officials sell-out cheap.

    Their voters believe the lies despite being screwed each & every time thinking that the other guy would be so much worse.

    For a few thousand dollars they manage to purchase hundreds of thousands in benefits.

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

  19. icon
    nasch (profile), 30 Apr 2021 @ 7:09pm

    Re: flaw

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

    https://en.wikipedia.org/wiki/Regulatory_capture

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

  20. icon
    sumgai (profile), 1 May 2021 @ 8:48am

    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.

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

  21. identicon
    Anonymous Coward, 2 May 2021 @ 1:57pm

    How the fluck did they think buying AOL would be profitable?

    Well, they got this floppy disk in the mail...

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

  22. icon
    Scary Devil Monastery (profile), 3 May 2021 @ 1:29am

    Re: Cursed Asset

    "AOL is approaching a kind of Hope Diamond cursed status."

    Well, no...you can't blame the Hope Diamond for its bad rep. AOL, however, is what the KKK would be if they were a corporation - utter fsckups who do no one any good and subsist entirely on an echo chamber of iterative hype.

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

  23. icon
    Scary Devil Monastery (profile), 3 May 2021 @ 1:39am

    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.

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


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