Dec 11, 2018

Verizon takes $4.6 billion write-down for media unit

Photo: Richard Levine/Corbis via Getty Images.

Verizon announced in a regulatory filing Wednesday that its media arm, which includes the remnants of internet giants AOL and Yahoo, is much less valuable today than the telecom giant thought the unit would be when it assembled the division just last year.

Why it matters: With a $4.6 billion write-down, Verizon is essentially admitting that its media unit, currently called "Oath" but soon to be rebranded as Verizon Media Group, is now worth roughly half of the $10 billion Verizon spent on the business over the past two years.

Background: Verizon foreshadowed Oath's demise last quarter when it said it expected 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."

Yes, but: The numbers reported Wednesday are significantly more worrisome than what executives alluded to in October.

Between the lines: Oath is still the fourth-most visited platform on desktop and web, according to the latest web rankings from Comscore, surpassing properties like Amazon and Twitter. But the company is struggling to make ad money off of that traffic.

  • Verizon hoped to grow its ad tech business to compete with the likes of Google and Facebook, which is why it initially assigned former AOL CEO and internet veteran Tim Armstrong to run its media unit. (Armstrong and several other C-suite executives have since resigned.)
  • But the ad landscape is more competitive now that companies like Amazon and Pinterest are doubling down on advertising for their business models as well.
  • Oath has begun testing other forms of revenue, like subscriptions, in an attempt to make up for an ad falloff, but numbers today suggest little confidence in that plan.

The bigger picture: Verizon's media business is just one of many parts of its business that the mobile and pay-TV company is reevaluating.

The bottom line: Verizon executives are now saying that the decision to assemble Oath at the beginning of 2017 may not have been the smartest bet.

Our thought bubble: Verizon's strategy to spend $10 billion assembling a digital marketing business is vastly different than rival AT&T's strategy to spend $85 billion to create a content and licensing business. Early positive earnings results suggest that AT&T's investment seems to be working for the telecom giant.

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Trump slams Dems as GOP sues California over mail-out ballot plan

California Gov. Gavin Newsom during a February news conference in Sacramento, California. Photo: Justin Sullivan/Getty Images

President Trump accused Democrats of trying "Rig" November's general election as Republican groups filed a lawsuit against California Sunday in an attempt to stop Gov. Gavin Newsom (D) from mailing ballots to all registered voters.

Driving the news: Newsom signed an executive order this month in response to the coronavirus pandemic ensuring that all registered voters in the state receive a mail-in ballot.

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 7 p.m. ET: 5,383,582 — Total deaths: 344,077 — Total recoveries — 2,158,031Map.
  2. U.S.: Total confirmed cases as of 7 p.m. ET: 1,640,972 — Total deaths: 97,679 — Total recoveries: 366,736 — Total tested: 14,163,195Map.
  3. World: White House announces travel restrictions on Brazil, coronavirus hotspot in Southern Hemisphere Over 100 coronavirus cases in Germany tied to single day of church services — Boris Johnson backs top aide amid reports that he broke U.K. lockdown while exhibiting symptoms.
  4. Public health: Officials are urging Americans to wear masks headed into Memorial Day weekend Report finds "little evidence" coronavirus under control in most statesHurricanes, wildfires, the flu could strain COVID-19 response
  5. Economy: White House economic adviser Kevin Hassett says it's possible the unemployment rate could still be in double digits by November's election — Public employees brace for layoffs.
  6. Federal government: Trump attacks a Columbia University study that suggests earlier lockdown could have saved 36,000 American lives.
  7. What should I do? Hydroxychloroquine questions answeredTraveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

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Updated 2 hours ago - Politics & Policy

Federal judge strikes down Florida law requiring felons to pay fines before voting

Gov. Ron DeSantis. Photo: oe Raedle/Getty Images

A federal judge on Sunday ruled that a Florida law requiring convicted felons to pay all court fines and fees before registering to vote is unconstitutional.

Why it matters: The ruling, which will likely be appealed by state Republicans, would clear the way for hundreds of thousands of ex-felons in Florida to register to vote ahead of November's election.