Verizon has set some pretty ambitious goals for Oath, the moniker chosen for AOL and Yahoo’s combined assets post-merger. Specifically, the carrier has set out to attract more than 10 million creators and two billion consumers, and achieve revenues in the $10 billion to $20 billion range, all by 2020.
But the question remains whether Verizon can turn such a sprawling empire into a success. According to two experts – Mike Kelly, CEO of Kelly Newman Ventures and former president of AOL Media Networks, and Ezra Kucharz, media veteran and former president of digital media at CBS – Verizon certainly has the data and audience to do it. The key, they said, will be relevance.
Kelly noted Verizon is using Oath to build a platform that’s open to content creators, and is backing that up with “very sophisticated advertiser technology they’ve been building for the past 12 years.” The combination of the two, he said, has the potential to really boost growth.
“For example, by taking a platform approach to content creation and advertising, AOL was able to scale from 600 million to 2.5 billion. Therefore, it is not out of the realm of possibilities for Oath to reach these goals; it is possible to grow revenues really quickly when you take a platform approach,” Kelly explained. “What they acquired with AOL may be the world’s best collection of advertising technology and with Yahoo, they get a massive digital audience. Add to that Verizon’s user base and the massive amount of data that they see every day and it becomes beyond compare (to a small content venture like go90).”
Similarly, Kucharz said what Verizon has compiled between AOL, Yahoo, and its own user metrics will give it “the greatest opportunity, outside of Google and Facebook, to dominate digital brand advertising if they can get all of their products and platforms sharing data.” The key to capitalizing on that, Kucharz said, will be the relevance of Oath’s products to consumers.
“Failed attempts at new content, products, and platforms at the legacy AOL and Yahoo businesses have decreased their relevance in the minds of consumers and marketers alike,” he observed. “Simply increasing the volume of content will not work. Quality content will always win over a larger quantity of mediocre content.”
Both Kelly and Kucharz said Verizon’s cross-platform promotion strategy should be a win for advertisers – assuming those advertisers are willing to buy in one place. Kelly noted that unlike AT&T, which has properties in many different verticals, Verizon’s assets play almost exclusively to a digital audience. Thus, he said, another acquisition may not be out of the question for the carrier to form a more well-rounded package.
“They may consider looking into over-the-top video and television,” Kelly said. “My prediction is that they’ll look to purchase an over-the-top video platform like Netflix, Hulu, etc.”
One other thing Verizon has going for it? Tim Armstrong’s leadership. Kelly and Kucharz both expressed faith in Armstrong’s ability to navigate the transition and turn Oath into a money maker for the carrier.
“If anyone can pull it off, it is Tim Armstrong and his team at Oath,” Kucharz concluded.
