Oct 23, 2018

Verizon suggests its media business is struggling

Photo: Richard Levine/Corbis via Getty Images.

Verizon says its media arm, Oath, which consists of AOL, HuffPost, Yahoo and other digital brands, is struggling to drive revenue.

Why it matters: When Oath was created in 2017, executives pitched its advertising business as being a serious ad competitor to Google or Facebook, but it has thus far failed to position its growth to take on those tech giants over the long-term.

According to Verizon, revenues for Oath were $1.8 billion in 2018's third quarter, 6.9% below the same time last year.
The company says it expects Oath revenues "to be relatively flat" in the near-term and "does not expect to meet the previous target of $10 billion in Oath revenues by 2020."

Between the lines: Oath is still the fourth-most trafficked platform on desktop and web, according to the latest web rankings from comScore, surpassing properties like Amazon and Twitter.

The problem is that it hoped to grow its revenue by increasing ad revenue, which is a more competitive sector now that companies like Amazon, Snapchat and Pinterest are doubling down on advertising for their business models as well.
Oath is expected to grow its ad business by just 2% over the next four years while Amazon expects its ads arm to see a 45% jump by 2020, per eMarketer.

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