Question 1

Why is Verizon investing billions in legacy internet brands like Yahoo and AOL?

Accepted Answer

Verizon is scaling a global data-driven platform to challenge the 76% market share currently held by Google and Facebook in US digital advertising. By combining Yahoo with its $4.4 billion acquisition of AOL, Verizon aims to generate annual revenues between $10 billion and $20 billion.

Question 2

What does this transaction mean for the Australian media market?

Accepted Answer

The deal creates a strategic opening for Seven West Media to potentially buy out Yahoo’s 50% stake in the Yahoo7 joint venture. This would allow Seven to consolidate a digital asset that generated $99.6 million in revenue for the year ended June 2015.

Question 3

Is the Yahoo7 joint venture still a profitable asset for Seven West Media?

Accepted Answer

Yes, the venture remains a key contributor to Seven’s digital performance, delivering a half-year profit share of $5.7 million. Seven is leveraging this foundation to transition toward its 'MAVENs' strategy, focusing on mobile and video to offset declines in traditional display advertising.

Question 4

Can a combined Verizon-Yahoo entity actually compete with the tech giants?

Accepted Answer

The merger is designed to act as a 'third force' for advertisers who are currently restricted by a duopoly controlling over three-quarters of the market. Success depends on leveraging combined data sets to capture a significant portion of the global digital spend currently flowing to the US tech leaders.

Verizon Yahoo buy could create a ‘third force’

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Key Takeaways

Frequently Asked Questions

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