×
You will be redirected back to your article in seconds

Verizon’s Oath Revenue Drops 6.9% in Third Quarter Amid Exec Shuffle

Verizon’s Oath internet media businesses — anchored by Yahoo and AOL — lost steam in the third quarter of 2018.

For Q3, the telco reported Oath revenue of $1.8 billion, down 6.9% compared with the year-earlier quarter. Verizon said it expects Oath revenue to be “relatively flat in the near term” and that it does not expect to meet the previously set target of $10 billion in Oath sales by 2020.

The $10 billion revenue goal by 2020 had been set by Tim Armstrong, who exited as Oath’s CEO earlier this month. Now leading the unit is K. Guru Gowrappan, the former Alibaba Group exec who joined the company as Oath president and COO in April.

In announcing Q3 earnings, Verizon said Oath’s search and desktop traffic — the largest component of the division’s revenue — has continued to decline, offsetting growth in mobile usage and video consumption, including its partnership with the NFL to live-stream games on mobile. Oath’s management team is now focused on completing the integration of the legacy AOL and Yahoo advertising platforms by the end of 2018, CFO Matt Ellis said on Verizon’s earnings call Tuesday.

“The cost side of that business is being managed well,” Ellis said on the call. “We just need the revenue side of the business to achieve its potential, too — and then we’ll be happy with the business.”

The revenue decline at Oath is likely to increase speculation that Verizon will try to sell or spin off the division; company execs in recent months have denied they are considering divesting Oath. Ellis did not directly address the question on the earnings call but his comments signaled that Verizon is committed to Oath. Verizon paid around $10 billion to acquire AOL and Yahoo, once powerhouse internet brands, in 2015 and 2017, respectively.

Oath’s media and tech brands include TechCrunch, Engadget, AOL.com, HuffPost, Yahoo Sports, Yahoo Finance, RYOT, MAKERS, Tumblr, Build Studios, Yahoo Mail and Verizon Digital Media Services. In the past year, Verizon has offloaded a few Oath properties, including Flickr (acquired by SmugMug) and Moviefone (sold to MoviePass parent Helios & Matheson Analytics).

Overall, Verizon posted Q3 revenue of $32.6 billion, up 2.8%, and reported $1.19 in earnings per share (versus 89 cents in Q3 2017), topping Wall Street expectations on both fronts.

The company’s results were driven by Verizon Wireless, which had total revenue of $23.0 billion for Q3 (up 6.5%). Verizon reported 515,000 retail postpaid net additions in third-quarter 2018, including net phone additions of 295,000.

Wireline revenue of $7.4 billion was down 3.7% year over year. Total Fios revenue was $3.0 billion, up 1.6%, with a net gain of 54,000 Fios Internet connections and a loss of 63,000 Fios Video connections “impacted by ongoing shifts away from linear video offerings” — i.e., cord-cutting. Verizon expects to see continued pressure in its pay-TV business, and has seen an uptick in new customers who take broadband-only service, Ellis said.

Verizon touted its 5G wireless push: On Oct. 1, it became the first carrier to offer home broadband via 5G in Los Angeles, Sacramento, Houston and Indianapolis.

More Digital

  • Streaming Powers U.S. Latin Music Market

    Streaming Powers U.S. Latin Music Market to 18% Growth

    The U.S. Latin music business experienced its second year of double-digit growth in 2018, driven almost entirely by streaming, according to the RIAA’s year-end report. The Latin market grew 18% in 2018 to $413 million, driven by a nearly 50% growth in revenues from paid subscriptions, the report says. Streaming formats made up a whopping [...]

  • Editorial use only. No book cover

    Entertainment One, Universal to Partner on Home Entertainment

    Entertainment One and Universal Pictures Home Entertainment have signed a multi-year, multi-territory distribution agreement. UPHE will serve as the home entertainment distributor of eOne’s offerings across both physical and digital formats. The pact covers film, television, and select family content and includes all sales, marketing, and distribution, spanning the U.S., Canada, U.K., Germany, Spain, Australia, [...]

  • 'Darkwood' Delivers Surreal Horror to Nintendo

    'Darkwood' Delivers Surreal Horror to Nintendo Switch

    “Darkwood” is the sort of game you might not expect to find on the Nintendo Switch: It’s dark, violent, and immensely unsettling. But the top-down survival horror title is also an excellent fit for the platform, the sort of evocative experience that a player can methodically pick at in short stints, or sink into for [...]

  • MLB All-Star Game

    T-Mobile’s MLB.tv Subscription Giveaway Available Now

    T-Mobile is once again giving its customers free access to MLB.tv, Major League Baseball’s streaming service. The telco began giving away access to the streaming service Tuesday; anyone interested in signing up has until April 1 to do so. MLB.tv allows subscribers to stream regular season games on mobile and TV connected devices, and is [...]

  • The Federal Trade Commission building in

    FTC to Examine Privacy Practices of Major Internet Providers

    WASHINGTON — The Federal Trade Commission said it is launching an examination of the privacy practices of major internet providers including AT&T, Verizon, and Comcast to study how they use consumer information. Capitol Hill lawmakers have been giving added scrutiny to the tech industry’s use of consumer data for more than a year, but much [...]

  • Jessica Rodriguez Strictly Business Podcast

    Listen: Univision's Jessica Rodriguez on Shaking Up a Traditional TV Brand

    With new leadership in place at Univision, the network is evolving in ways its fast-growing Hispanic audience in the U.S. might find surprising. Look no further than the broadcaster’s primetime schedule, according to Jessica Rodriguez, CMO of Univision Communications and president/COO of Univision Networks, who relied on audience research to shake up traditional notions of [...]

  • Electronic Arts Logo

    EA Laying Off 350 People, About 4% of Staff

    Electronic Arts is laying off about 350 of its 9,000-person staff, CEO Andrew Wilson announced in a blog post on its website Tuesday. In the brief, open letter, Wilson noted that the move was made to “address our challenges and prepare for the opportunities ahead,” and to “better deliver on our commitments, refine our organization [...]

More From Our Brands

Access exclusive content