![]() ![]() The first real lesson of this is that Verizon didn’t know anything whatsoever about the OTT space. Let’s then try not to make shallow things even shallower let’s learn some real lessons. As far as the Street is concerned, “buy on the rumor sell on the news” (or vice versa) has been the adage all along stocks tend to move based on advanced predictions not current steps. Did Verizon expect something other than competition when they bought into a space to compete there? Did they miss that the companies they bought were not only not incumbents, but had long passed their prime? Yes, the deal was shaky from the first and in fact got a bit shakier as discussions progressed. Obviously the commentary is a bit shallow. Wall Street thought the whole idea was stupid long ago, and as a result have rewarded Verizon with a bit of an uptick on their stock. Billboard says that the Verizon units lacked the scale of Google or Facebook. The Wrap says the whole idea was shaky from the start. According to the Financial Times, Verizon is “dialing back” its media aspirations to focus on core telecom. Verizon says, essentially, that Oath experienced an unexpectedly competitive environment. Let’s look at the explanations that various pundits have given. We still have to ask “Why?” because the failure could signal some real challenges for operators down the line. I’d bet that the fact that the two deals failed to return value is no surprise to most, either. The decline is largely the drop in brand (in financial terms “good will”) value, no surprise since most of us never heard of Oath. The company is taking a massive $4.6 billion write-down on its Oath media unit, the repository for its AOL and Yahoo units, admitting that the residual value is only $200 million. Verizon has admitted that its purchases of Yahoo and AOL have resulted in…nothing much.
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