With the $4,8 billion acquisition of Yahoo, the telecom giant Verizon is entering the global digital advertising landscape, facing the likes of the industry giants, Facebook and Google
The slow decline of Yahoo was concluded in the late June 2016, when Verizon Communications Inc., a telecom company and the largest wireless communications service provider in the US, announced its acquisition for $4.83 billion in cash, including Yahoo’s advertising, content, search and mobile activities. Just a year after the acquisition of AOL, a multinational mass media corporation (owning The Huffington Post, TechCrunch and Engadget), with the Yahoo deal Verizon becomes highly competitive in the digital advertising marketplace.
The overall plan is to integrate Yahoo into AOL, and this combination would be the chance for the Verizon’s real scale. As pointed out by marketingland.com, once we look closely the details, the data story unfolds: a strong set of signals about consumers, such as demographics, interests, location, purchase behaviors and so on, that will help marketers predict what users want and deliver stronger ad targeting. In the words of AOL’s CEO, Tim Armstrong, “the driving force behind [the Yahoo-Verizon deal] is about consumer scale of getting over a billion users and we have a 2020 goal to get to two billion users overall.” With over 1 billion monthly active users, according to Yahoo internal user metrics from January 2016, that includes 600 million monthly active mobile users through its search, communications and digital content products, Verizon acquired important asset in order to achieve its new business goals – become the third main player in the global advertising industry.
The dominance of Google and Facebook leaves little or no space for the new entry, but the user base and some interesting assets, such as BrightRoll programmatic video ad service, Gemini, the intent-driven advertising platform, and Flurry, the mobile developer suite, will certainly be very helpful. As Armstrong explains, Google’s power was based on its search capabilities and Facebook is the leader in social media, but Verizon’s strength was in building a “house of brands”: the Yahoo user data could be combined with insights from Verizon’s mobile, internet and cable customers; the information will help power Verizon’s programmatic ad technology platforms, which utilize consumer behavior to determine which digital ads to display.
In the next few months, as the “battle” unfolds, it will be interesting to see the market response and the positioning of the new player, and we will most certainly stay tuned and follow the updates.
Interesting reads on the evolution of Yahoo: