August 1st 2016

Verizon Buys Yahoo and What That Means.

Posted by Will Shadbolt

Earlier this week it was announced that Verizon had bought Yahoo for about $4.83 billion. The deal is expected to be closed in the first quarter of next year. Last year Verizon acquired AOL. Owning these two platforms could turn Verizon into a force in global mobile media, competing for ad money with even Google and Facebook. 

Despite Yahoo's seeming waning relevance to the digital landscape, the company is estimated to bring in 1 billion users each month with over half of them active on smartphones. AOL, despite similar public perception, features The Huffington Post, Engadget, and TechCrunch, among others. With all these digital properties coming together under Verizon, it does not seem to be a stretch to say Verizon could soon become a powerhouse (but not a monopoly: the combined traffic from these only makes up 7% of the top 50 digital properties'). 

Although Yahoo itself is a worthwhile investment, the properties it owns no doubt sweetened the deal. Here's what this acquisition means for ads and targeting. 

Yahoo offers an ad platform, Gemini, which can enable advertisers to use native and keyword-based ads or promos. Companies like Jeep have utilized the service and claimed it boosted completed-view rates by 50%. 

Also, with Yahoo's large mobile user base and 100 million Verizon consumers, they could potentially become a juggernaut in mobile marketing. Making money off of mobile traffic is difficult, however, and it could be tough for them to break through. The possibility of utilizing specific location and behavioral information is enticing, but it has yet to be seen if Verizon can actually pull this off.

Yahoo could also give a hand to services already under Verizon's control. AOL is trying to improve its mobile video programs with the Go90 streaming app, but so far has had trouble catching on. Yahoo's own programmatic video app, BrightRoll, which can put out targeted ads on mobile, tablets, and desktops, could help Go90 gain steam. There's also Flurry, which handles mobile app analytics, through this deal. This company allows marketers to track the number of people who go to a store after seeing an ad video. 

And, finally, there's Tumblr. The site was bought by Yahoo in 2013 for $1.1 billion. Since then, however, updates for the site have been slow to come. A live video feature for Tumblr was added a year after competitors had added similar apps. In addition, Yahoo and Tumblr featured a combined sales team, which created problems for selling specific advertisements for each site. 

Verizon has already taken an interest in Tumblr. Now bloggers on the site will be able to make some cash with paid promotions, although the exact percentage users will receive is still unclear. Bloggers are automatically signed up for this plan, which could create some unease among them. It remains to be seen what kind of effects this will have on Tumblr. 

But some experts do not think the deal will change much. At best, they say, Verizon could become a distant third, far closer to its other competitors than Facebook and Google. No matter what happens to Verizon now, though, it is likely the digital landscape will be permanently changed.

And whatever may come, Giovatto Advertising is prepared. We have experience across a multitude of platforms, so that no matter which ones get bought or sold, rise to prominence or fade into obscurity, Giovatto Advertising has the ability and capacity to create a digital campaign that reaches target audiences. We've also run a number of mobile and targeted ads and also a Google Adwords Certified Partner, so we can take full advantage of any trends this deal may cause. When it comes to advertising, trust the experts at Giovatto Advertising.

About the Author