In a Securities and Exchange Commission filing on Tuesday, Verizon Communications said its media brand, Oath, is worth almost nothing. Oath is the name that Verizon gave to various media properties it acquired, including Yahoo in 2017 for $4.5 billion and AOL in 2015 for $4.4 billion. AOL itself owned a number of media brands, including the Huffington Post, now HuffPost.
Verizon will take a $4.6 billion write-down on Oath, which puts the goodwill valuation of the media brand at about $200 million. (“Goodwill” encompasses a company’s brand value and reputation.) The write-down was the result of a re-accounting of the value of Oath, which occurred after Verizon replaced its old CEO, Lowell McAdam, with new CEO Hans Vestberg last summer. Before the re-accounting Verizon said the Oath brand’s goodwill valuation was $4.8 billion.
Oath, Verizon said in the filing, “has experienced increased competitive and market pressures throughout 2018 that have resulted in lower-than-expected revenues and earnings. These pressures are expected to continue and have resulted in a loss of market positioning to our competitors in the digital advertising business.”
Verizon said it didn’t see the synergies it had expected from the combination of Yahoo and AOL. The Oath brand was also diminished by the news that Yahoo suffered a massive data breach in 2014 that affected 500 million users.
Verizon said Monday that it had offered voluntary buyout deals to 44,000 management employees, and that 10,400 of the managers had accepted the offer. The buyouts are part of a plan to cut costs and shift emphasis back to the wireless part of Verizon’s business.
The media and advertising business is a tough space to jump into for a telecom company, especially as the far more experienced Google and Facebook (and perhaps, soon, Amazon) dominate the sector.