Verizon this week made a huge leap forward with its deal to acquire of Yahoo’s core assets for $4.83 billion.
The deal takes Verizon’s already expansive reach to a whole new level of scale, bringing to the table a monthly mobile audience of 600 million users.
When combined with Verizon’s AOL business and the company’s relationships with major league sports organizations, TV networks and content brands, the addition quite feasibly puts Verizon in position to hit its goal of 2 billion users and $20 billion in revenue from its media business by 2020.
More than just boosting Verizon’s balance sheet, though, such growth and scale has the potential to put Verizon in more direct competition with digital media and advertising giants Google and Facebook. But that begs the question, is Verizon up for that fight?
During Tuesday’s earnings call, Verizon CEO Lowell McAdam didn’t rule it out. In fact, it sounds like McAdam has his eye on the prize.
Despite the completion of such a big deal, McAdam said Verizon is far from done expanding. And the company’s next moves, he said, will be determined by what’s necessary to meet customer needs and “drive us to take a larger share of this growing market.”
“You say, well, are you finally done expanding and are you going to reduce your capital? And my answer always is, I hope not. Because if we do, then we’re standing still,” McAdam said.
“So there’s been a lot made of, oh, are we going to challenge Google and Facebook in this process,” he continued. “I just say, look, we plan on being a significant player here. The market is going to grow dramatically. We’re a small player today relative to them. All we need to do is take more than our fair share of the growth of the market and this will be a success for us. And we certainly expect to do better than that.”
So it looks like the intentions are there.
But what do you think? Will Verizon be able to mount a meaningful challenge to Google and Facebook?