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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