Verizon’s Only Oath Is to Its Wireless Business
The $4.6 billion writedown of its digital-ad unit is the clearest signal yet that retreating from the media business is the right call.
A renewed focus on what it does best.
Photographer: Patrick T. Fallon/BloombergThe name was the first sign of trouble: Oath. After it was unveiled in April 2017 and met with confusion and mockery, Verizon Communications Inc. said calling its new advertising subsidiary Oath was meant to reflect a feel-good commitment, or some such. Now, Verizon seems to want out of that commitment.
Verizon spent about $9.5 billion to assemble Oath through the acquisitions of AOL and Yahoo during the last few years, replacing two well-known brands with the meaningless moniker and putting former AOL chief Tim Armstrong in charge of the new division. His goal — quite a lofty one — was to create a formidable competitor to Google and Facebook Inc. in digital-ad sales. Instead, the company said this week that Oath’s revenue and earnings have been lower than estimated due to competitive pressures and that the benefits of integrating AOL and Yahoo have also fallen short. Revised financial projections thus revealed a substantial reduction in Oath’s fair value, resulting in a $4.6 billion writedown — about half what Verizon paid for the business. Should have called it Ouch.