Video Briefing: Oath’s future inside Verizon is cloudy
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The biggest question surrounding Oath has been what happens to the company — formed by Verizon following a $9 billion merger between AOL and Yahoo — now that Verizon seems to be scaling back on its media ambitions.
But with Oath CEO Tim Armstrong reportedly negotiating his exit from the company, the more immediate concern might be what happens with Oath’s platforms business, which houses the company’s various advertising and tech services.
THE KEY HITS:
- Oath CEO Tim Armstrong is reportedly on his way out of the company.
- Earlier this year, Oath hired former Alibaba exec K. Guru Gowrappan as its COO, around the same time it began a shift toward its publishing properties.
- Sources said this shift has come at the expense of Oath’s platforms business.
- This has become even more pronounced this summer as Gowrappan took over day-to-day control of Oath, prompting rumors that Armstrong was on his way out.
- Hanging over all of this is whether or not Verizon will remain committed to Oath under a new CEO who has signaled that he’s not interested in growing a media business.
In April, Gowrappan was named president and COO of Oath; he was pitched as Armstrong’s number two who would take on operational responsibilities as Armstrong focused on “strategic Oath opportunities and Verizon,” Armstrong said.
Around that time, with the eventual shut down of Verizon’s expensive mobile video bet Go90 looming, Oath began to shift its priorities to its publishing properties, which include HuffPost, Yahoo Finance, Yahoo Sports and other sites, sources said. (When Go90 shut down, Verizon made a point in its official statement to say that it will focus on “building its digital-first brands at scale in sports, finance, news and entertainment for today’s mobile consumers and tomorrow’s 5G applications”).
With products such as One by AOL, BrightRoll and Yahoo Gemini, Oath is also a prominent vendor in digital media. Oath even recently announced that it had consolidated its various ad tech products and services into one group called Oath Ad Platforms.
But sources told me that the focus on building out Oath’s publishing properties has come at the expense of the products and services in Oath’s platform business. With Gowrappan now running the show and leading direction on Oath’s media strategy, Oath is directing more attention and resources toward its publishing businesses than its platform businesses, sources said.
To be clear, there is no indication that Oath plans to shut down its platform businesses; it’s just become second fiddle, a “multi-billion dollar and profitable” afterthought, as one source said.
It’s also important to note that Armstrong, when he was CEO of AOL, played a big hand in building the current version of the Oath platform business. A lot of the products in the portfolio were built or acquired by AOL.
Hanging over all this are Verizon’s own media ambitions — or lack thereof following the appointment of new Verizon CEO Hans Vestberg, who doesn’t seem to share previous Verizon CEO Lowell McAdam’s interest in building a big media business. This wasn’t helped by the fact that Verizon took a huge loss on Go90, which was moved under Oath’s organization until it was finally laid to rest earlier this summer.
What does this mean for Oath? Sources said they expect the focus to remain on the publishing properties but weren’t able to give a confident answer on the rest of the business. Stay tuned.
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Read more about the role of talent in building franchises here.
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Read more about Facebook advertising here.
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