“We are not selling HuffPost,” said Gowrappan, speaking at the Code Media conference in L.A. Tuesday. “It’s so core to our content… We are focusing on creating good journalism, and giving valued content to consumers.”
Verizon had been looking to offload HuffPost, according to a Financial Times report last month. So it could be that the company failed to find a buyer for HuffPost willing to pay the right price.
At this point, Verizon Media has no plans to divest any properties from the Yahoo-AOL group, Gowrappan said.
Unlike like Netflix, Hulu or Disney Plus, Gowrappan said, “we’re not in the long-form, scripted business — but we are in the content business,” citing news, sports, entertainment and finance as core pillars for Verizon Media. The telco realized it couldn’t “fight that battle” in the premium entertainment space with Go90, and “that’s the reason we shut it down,” the exec said.
Indeed, Verizon sees the likes of Disney Plus as partners: The telco is offering Disney Plus free for one year to wireless customers on unlimited plans. Gowrappan declined to say how many Verizon subs took the offer for Disney Plus, which Disney claimed had signed up over 10 million users on launch day and in the weeks leading up to it.
“I’m sure there was a good amount of contribution. They’re an important partner — it was a big deal for us,” he said. He did say that nearly 40% of the traffic across Verizon’s network was from Disney Plus on the service’s launch day. Peak traffic overall on Nov. 12 for the telco was 1.5 terabits per second, 3-4 times an average day, according to Gowrappan.
Verizon Media’s revenue streams include advertising, subscriptions (e.g. HuffPost Plus and TechCrunch’s Extra Crunch), and transactions and ecommerce, for which the company is taking a revenue cut of 10%-15%. In the last category, Gowrappan cited the launch of Yahoo Sportsbook to allow mobile sports betting (initially only for users in New Jersey) under deal with MGM Resorts. Since the start of the NFL season, online mobile betting on football has topped $1 billion just in the Garden State alone.
Gambling is “a massive thing we’re doing with transactions,” Gowrappan said.
Speculation about Verizon selling off HuffPost came after the telco has sold off multiple pieces of the former Yahoo and AOL groups. In August, Verizon announced a deal to sell Tumblr — the blogging site Yahoo acquired for $1.1 billion six years ago — to Automattic, the company that owns and operates online-publishing site WordPress.com for about $3 million, according to an Axios report citing anonymous sources. Tumblr was “not part of our core strategy,” Gowrappan said Tuesday.
Verizon began pruning the Yahoo-AOL portfolio (previously known as Oath) last year. It sold photo-sharing site Flickr to SmugMug and Moviefone to Helios & Matheson Analytics, the parent of now-defunct theater subscription service MoviePass.
Verizon Media revenue in the third quarter of 2019 was $1.8 billion, flat with the prior quarter and down 2% year over year. Revenue from mobile advertising is now outpacing desktop, which has been declining for years, which is key as Verizon gears up to launch a nationwide 5G wireless network, Gowrappan said.
The telco spent around $10 billion to acquire Yahoo and AOL, merging them under the Oath operating division under then-CEO Tim Armstrong. But despite hoped-for synergies and economies of scale, Oath’s business continued to decline — and the company took a $4.6 billion write-down on the AOL-Yahoo assets. Verizon installed Gowrappan, previously a top exec at China’s Alibaba Group, as CEO of what is now called Verizon Media in October 2018.