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Company Brief
Verizon Media

by Brady Hicks

Copyright 2020, Faulkner Information Services. All Rights Reserved.

Docid: 00021980

Publication Date: 2012

Report Type: VENDOR

Preview

Verizon Media is the media-targeted unit of Verizon Communications. The
property – which is formerly known as Oath – consolidates Verizon’s acquisitions of
both AOL (2016) and Yahoo (2017), among other assets. The resulting subsidiary
offers a diverse collection of media and technology brands that target consumer
and business customers with various advertising, publishing, streaming, and
entertainment services. This brief takes an extended look at Verizon
Media and its
operations.

Report Contents:

• Fast Facts
• Description
• Key Executives
• Major Products
• Recent Activity

Fast Facts

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Name: Verizon Media
Headquarters – East (formerly AOL)
770 Broadway
4th, 5th, 6th, and 9th Floors
New York City, NY 10003 US
Phone: (212) 206-4400
Headquarters – West (formerly Yahoo)
781 First Ave.
Sunnyvale, CA 94089 US
Phone: (408) 349-3300
Web:
http://www.verizonmedia.com/
Type of Vendor: Global Internet Services, Media
Founded: 2017 (as Oath, renamed in 2019)
Predecessors: AOL; Yahoo
Service Areas: Global

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Description

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Verizon Media – formerly Oath – is a subsidiary of Verizon Communications that has its roots in the
company’s June 2015 acquisition of AOL ($4.4 billion) and June 2017 purchase of
Yahoo ($4.48 billion). In all, Verizon Media encompasses dozens of popular brands for its
products and services. These include:

• Content – Yahoo, TechCrunch, engadget, auto blog, RYOT, Rivals
• Communities – #BuiltbyGirls, Build, MAKERS, In the Know
• Utilities & Communication – AOL, Yahoo, engadget
• Advertising & Distribution – Flurry, Verizon
  Digital Media Services

HuffPost, another Verizon Media property, is set to be acquired by BuzzFeed,
with transaction expected to close in 2021.

AOL’s History

AOL offered digital products and services for
consumers, advertisers, publishers, and subscribers, and focuses on engaging
branded digital content, products, and services. The company also provides advertising
services via properties such as AOL.com, Moviefone, Techcrunch, and Engadget, as
well as via third-party Web sites. Among its holdings were the Huffington Post
Media Group, a business division it founded after acquiring the online news site
in 2011. The company, despite its current
online content and advertising business,
is probably still best known for its now-defunct America Online Internet
service
and ubiquitous “AOL disks,” which brought phrases such as
“Welcome” and “You’ve Got Mail” into the common vernacular. Despite no
longer being in the ISP game, AOL at its peak provided more than 30
million members¹ worldwide with
access to its online community. In more recent years, AOL struggled to remain
profitable in the online advertising arena due to the strides made by Google, as
well as the move from online content-generation to social networking
and streaming news sites. Despite this trend, AOL has managed to
fortify its position as a provider of professionally produced online content by
diversifying its media properties and unifying them under a single flag. This
approach has led to a dense and interconnected series of offerings.

AOL had its origins in Control Video Corp., which offered the Gameline
online service for the Atari 2600 gaming console. Through this service,
subscribers could purchase a modem to temporarily download games and track
scores at a cost of $1/game. AOL was officially founded in 1985 as Quantum
Computer Services, a company that hired approximately 10% of Control’s
workforce. Quantum would later launch a dedicated online service of its own,
Quantum Link, for the Commodore 64 and 128 platforms. After leaving a
partnership with Apple in 1989, Quantum re-christened itself as America Online
(AOL).

The new America Online would later roll out as an Internet service provider
for users who were less familiar with computers. It offered a user interface
that allowed its members – primarily dial-up customers – to access online
content through its private community, as well as via traditional methods. It
also provided a number of online services including its popular e-mail services,
AOL instant messenger (AIM), video services, and local directory listings.

Perhaps the single greatest milestone in the company’s history came when AOL
and Time Warner revealed plans to merge in January 2000, with AOL shareholders
slated to own 55% of the new, combined company. The deal closed roughly one year
later, in 2001, after gaining regulatory approval from the US Federal Trade
Commission, Federal Communications Commission, and European Union. A few years
later, numerous reports identified Yahoo, Microsoft, and Google, as potential
candidates to turn AOL into a joint venture. On December 20, 2005, Google
revealed that it acquired a 5% stake for $1 billion. Less than one year following this
move, in August 2006, AOL began to offer many of its once-premium services for
free, regardless of whether the user was connected via an AOL Internet
connection. This included e-mail, chat rooms, video services, local directory
information, and customized domains; the company’s AIM instant messenger service
had been free for anyone to use for years at this point. The move was designed
to reduce the costs associated with its former business model by reducing the
use of AOL-owned access points and shifting members with high-speed Internet
access from client-based use to the supposedly more profitable advertising
business of AOL.com. AOL was also looking to slow the rate of members canceling
their accounts and defecting to free e-mail services such as Hotmail, Yahoo
Mail, and Gmail.

Despite the backing of financial giants like Google and Time Warner, the
relationship with its partial owners began to chafe on both sides, and rumors of
plans to spin the company off into an independent entity began circulating as
early as 2008. The spinoff eventually came to pass on December 9, 2009, ending
the tumultuous eight-year ownership of Time Warner. Soon, AOL decided to
completely reinvent itself, finally shedding the last vestiges of its former
life as an ISP. The company shifted in earnest toward online content generation
and advertising. Since it had few resources in these areas to start, AOL rapidly
expanded its abilities through a combination of brand and product upgrades and
acquisitions. Major purchases during this period of growth include the
acquisitions of technology news blog TechCrunch (2010) and Huffington Post
(2011). This second acquisition would prove particularly important for the
company, as the Huffington Post would become the foundation of AOL’s Huffington
Post Media Group, a brand that would come to include Moviefone, Engadget, Patch,
Stylelist, MapQuest, Cambio and about.me. The philosophy of the Huffington Post
would later be adopted in a wider range of AOL properties as well, with many
sites transitioning to the online news provider’s combination of professionally
produced content, user generated updates, and social networking interactivity.

In June 2015, Verizon Communications reached an agreement to purchase AOL for
$4.4 billion.

Yahoo’s History

Yahoo was founded in 1994 by Stanford Ph.D. students David Filo and Jerry
Yang, beginning as a hobby and later evolving into one of the most recognizable
Internet brands in the world and one of the most trafficked Internet
destinations worldwide. While most of the company’s services were available to
end-users free of charge, the company’s greatest revenue source was its sale of
online display advertising and sponsored search results, touting content
publishers such as eBay, WebMD, and Forbes.com as members of its affiliate
network.

Unable to effect a much-anticipated turnaround, in July 2016, CEO Marissa Mayer
announced the sale of Yahoo’s core operating business to Verizon for $4.8
billion in cash. This amount was subsequently lowered to $4.48 billion in light
of public revelations of a massive security breach affecting Yahoo user accounts
in 2013.

Some of the significant highlights in the company’s history are listed in the
brief timeline below.

• 1994 – Is
  created by Stanford University students David Filo and Jerry Yang.
• 1995 – Receives
  its initial investment and hires experienced business managers, led by Tim
  Koogle, who becomes CEO.
• 1996 – Launches
  its IPO, opening its first day at $13 per share and closing the day at $33
  per share … Teams with Softbank and its affiliates to form Yahoo Japan and
  Yahoo Europe.
• 1997 – Creates
  Netscape Guide by Yahoo for Netscape … Launches Yahoo Korea … Purchases
  Four11.
• 1998 – Acquires
  ViaWeb, WebCal, and Yoyodyne … Attempts to match AOL’s all-in-one service
  by developing a Yahoo Online service.
• 1999 – Introduces
  its Yahoo Radio broadcast Internet radio service … Teams with TIBCO to
  develop Corporate My Yahoo, a business intranet offering … Acquires
  GeoCities for $7 billion and broadcast.com for $5 billion.
• 2000 – Releases
  its Yahoo B2B Marketplace … Signs deals with Inktomi, Critical Path, and
  TIBCO to create enterprise information portals … Switches search engine
  providers, trading Inktomi for Google … Teams with SBC Communications to
  establish a co-branded dial-up Internet service and high-speed broadband
  Internet service.
• 2001 – Wins
  an unsolicited $436 million takeover bid for HotJobs.com … Acquires Launch
  Media.
• 2002 – Introduces
  a fee-based document-search service provided by Divine … With SBC,
  releases a national co-branded dial-up Internet service and high-speed
  broadband DSL service through SBC Yahoo … Buys Internet search engine
  company Inktomi, enabling it to compete in the search market as a competitor
  to Google … Appoints Terry Semel as CEO and Chairman.
• 2003 – Completed
  the acquisition of Overture, a Web search engine, which licenses its search
  capabilities to enterprises for use on their own Web sites.
• 2004 – Settles
  a pair of patent- and public trading-related cases with Google.
• 2005 – Signs,
  then extends, an agreement with Verizon Communications to establish a
  multi-year alliance. This agreement sees the delivery of a fully integrated,
  co-branded broadband offering to subscribers of Verizon’s DSL and
  fiber-based FiOS services … Acquires Pixora and Flickr.
• 2006 – Launches
  a major reorganization of its structure and management … Introduces Yahoo
  Go Mobile, a service that offers the company’s e-mail, messaging, address
  book, and search capabilities to mobile phone users.
• 2007 –
  Releases the oneSearch Internet search service for mobile phones, as well as
  its Panama search marketing platform … Appoints Co-Founder Jerry Yang as
  CEO … Combines its search and display advertising sales teams … Makes a
  set of purchases, including paying $350 million for Zimbra, which makes an
  Ajax-based e-mail client; online ad network BlueLithium for $300 million;
  and a full stake in Right Media for $650 million.
• 2008 – Receives
  an unsolicited offer to be acquired by Microsoft for $44.6 billion. The
  Yahoo Board of Directors rejects the offer, saying it undervalued the
  company … With Google, announces plans to enter into a non-exclusive
  agreement for the latter to allow Yahoo to run ads supplied by Google
  alongside Yahoo’s search results and on some of its Web-based properties in
  the US and Canada.
• 2009 – Signs
  a deal with Microsoft to partner for search and advertising. This decision
  essentially turns over its search operations to Microsoft’s Bing.
• 2011 – Fires
  CEO Carol Bartz after just two years in office.
• 2012 – Hires
  Marissa Mayer, formerly of Google, as its CEO.
• 2013 – Experiences a massive security breach that includes
  information from approximately three billion user accounts, ultimately
  reducing the company’s value upon purchase.
• 2016 –
  Announces the sale of its core operating business to Verizon Communications.

Verizon Media History

Major highlights from Verizon Media’s brief history include:

• 2015 – Verizon Communications acquires AOL and its various
  properties for $4.4 billion.
• 2017 – Verizon buy Yahoo for $4.48 billion and announces the
  formation of Oath, which will include the former assets of AOL, Yahoo, and
  Verizon Digital Media Services, among others … Is sued by Mozilla over
  alleged "breach of contract" … Joins the Global Internet Forum to Counter
  Terrorism, a group that was co-founded by Facebook, Twitter, Microsoft, and
  YouTube to help prevent terrorist content online.
• 2018 – Replaces former AOL and Oath CEO Tim Armstrong with new
  CEO Guru Kowrappan (Kowrappan had been hired as President and COO several
  months earlier) … Introduces the Ad Platforms Suite … Sells its Flickr
  photo-sharing service to SmugMug and its Polyvore properties to SSENSE …
  Creates the Cybersecurity Advisory Board … Joins the Linux Foundation as a
  "Gold member."
• 2019 – Is officially rebranded as Verizon Media in January, and
  immediately outlines plans to lay off 7 percent of its workforce … Sells
  Tumblr and its assets in Mapquest.
• 2020 – Agrees to sell HuffPost operations to BuzzFeed.

Current Strategy

Verizon Media’s operations include a diverse set of media and technology
brands that target consumer and business customers alike. The unit provides both
owned / operated and third-party search properties; mail / news / finance /
sports / entertainment offerings; and digital advertising / content delivery /
video streaming platform services. The Verizon Media platform, in particular, is
targeted toward media and entertainment companies, as well as businesses that
deliver digital products and services over the Internet.

Outlook

Given increasing demand for stable, high-quality video delivery in the face
of the ongoing novel coronavirus, Verizon Media expects to continue to drive
strong, increased customer engagement. The company – which pulled in $7.5
billion in revenue (2019) – believes that its digital platform can only continue
to "reshape the delivery of media and entertainment content.

Key Executives

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Verizon Media’s executive leadership team includes:

• Guru Gowrappan – CEO
• Julie Jacobs – Legal, regulatory, compliance, and public policy
  matters
• Ivan Markman – Revenue and marketing
• Andy Nebens – HR, global compensation, and benefits
• Rathi Murthy – Global technology strategy
• Kelly Liang – Global business development and partnership efforts
• Joanna Lambert – Consumer business
• Michael Albers– Consumer product management and design
• Andrea Wasserman – Commerce
• Kelly Hirano – Global engineering
• Monica Mijaleski – Global finance operations

Major Products

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Verizon Media offers solutions for advertisers and publishers, as detailed in Table 1.

Core Competitors

Verizon Media competes with many of the same vendors with which AOL and Yahoo once
battled. This includes competition for the time and attention of
consumers for advertising revenue, and for talent with companies such as
Google, Twitter, Facebook, Microsoft’s MSN, IAC, CBS Interactive, and
Comcast, among others. It also competes with other companies for
advertiser and publisher platform offerings, including programmatic
advertising offerings and video and mobile offerings. These competitors include YouTube
and Facebook, among other firms. Other competitors include bundled
subscription services providers (Microsoft and AT&T); online advertising
services (Microsoft, AT&T, Facebook, and Twitter); global media companies; content and
commerce Web sites (Amazon and eBay); and electronic commerce infrastructure
and application developers.

• Amazon: http://www.amazon.com/
• AT&T: http://www.att.com/
• CBS Interactive:
  http://www.cbsinteractive.com/
• Comcast: http://www.comcast.net/
• eBay: http://www.ebay.com/
• Facebook: http://www.facebook.com/
• Google: http://www.google.com/
• IAC: http://www.iac.com/
• Microsoft: http://www.microsoft.com/
• MSN: http://www.msn.com/
• Twitter: http://www.twitter.com/
• YouTube: http://www.youtube.com/

Recent Activity

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Past-year Verizon Media activity has included:

• November 2020 – Rolled out shoppable content and other resources
  … Reaches agreement to sell HuffPost to BuzzFeed for an undisclosed
  amount.
• October – Is sued by Investment Science for alleged theft of
  trade secrets.
• September – Rolls out election and polling resources ahead of the
  US Presidential election … Unveils Media Platform enhancements to support
  live streaming … Updates Yahoo Sports app with features to stream NFL
  content … Extends partnership with Broadsign to integrate Verizon
  programmatic DSP within Broadsign’s Reach Programmatic DOOH SSP … Forges
  partnership with DISH Media to give Verizon’s DSP automated access to DISH
  addressable ad inventory.
• August – Releases DSP contextual targeting solution … Folds
  TechCrunch within its operations … Partners with Westpac Group.
• July – Assists with "Groceries from Walmart" service for ordering
  goods online using Yahoo Mail … Names America Movil as exclusive reseller
  of advertising products in Mexico.
• June – Launches immersive online XR platform … Debuts TV
  tune-in attribution product … Introduces plans to foster more "inclusive"
  and "diverse" work environment … Reportedly joins "Project Protect"
  alliance …
• May – Joins the Digital Out-of-Home Everything group as an
  association member …  Reportedly updates DSP platform to intro
  "omnichannel inventory" options … Partners with Ampersand for the latter
  to employ Verizon Media’s DSP.
• April – Adds resources to analyze COVID-19 data … Debuts
  services for broadcasting and monetizing content … Introduces View Time
  Optimization software.
• March – Joins National Association of Broadcasters’ PILOT program
  …  Sees developer Daniel Aleksanderson determine in a study that its
  search engines deliver "biased" results.
• February – Opens London 5G Lab and Production Studio … Launches
  Cashay "personal finance hub."
• January – Appoints Rathi Murthy as CTO … Launches OneSearch.com
  consumer search engine.

References

¹Holahan, Catherine. “Will Less Be More for AOL?” BusinessWeek.
July 31, 2006.

About the Author

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Brady Hicks
is an editor with Faulkner Information Services. He writes about computer
and networking hardware, software, communications networks and equipment,
and the Internet.

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