Why Has Verizon Purchased a Company such as Yahoo?

Why Has Verizon Purchased a Company such as Yahoo

Yahoo is not the most successful internet company, so its purchase of Yahoo for more than $4 billion dollars has left many in the technology community wondering why.  What are the plans for Yahoo?

Various executives and journalists have suggested that, in the past, the amalgamation of telecommunications and content companies has not proved to be successful.  Verizon plans to merge Yahoo with AOL (purchased last year by Verizon).  The plan is that these companies, when combined, will be chasing advertising that is already being spent with other much larger companies including Google and its other offshoots.

Why Has Verizon Purchased a Company such as Yahoo?

However, Verizon appears to be looking closely at just what their customers want, and who they are. Rather than trying to attract customers directly, they are looking towards the companies that want to attract those customers.  The plan seems to be that these customers will use Verizon to attract these customers. They are not trying to gain access to users directly, but to attract advertisers, who will then use Verizon to attract their own users.  Verizon has a long history with other aspects of technology, and this is a major move for them, but it will impact many aspects of technology and how media and advertising is used globally.

There are issues to do with privacy and neutrality, but Verizon are looking beyond this.  They believe that they can use their telecommunication networks with other new properties, such as The Huffington Post.  They are hoping to use information about locations to streamline their advertising for users.  Sporting events could be available live on smartphones, giving advertisers a great opportunity.  Verizon’s combined companies service more than a billion users each month.  They are enthusiastic about change.

Maintaining the Empire

This year Verizon faced a fight with the unions, regarding those workers who look after their landlines.  The union members used several techniques, and finally a deal was negotiated.  This was not how Verizon wanted their image to be.  However, Verizon is a large company.  Annual revenues are more than $130 billion, with a huge number of workers and being one of the biggest wireless companies the strike had an impact on its profits for the last quarter, and they are involved in price wars with other companies.  One of the reasons they are looking at digital marketing is so they can maintain their sales and profits.  It is trying to change its image from the telecommunications industry to being a strong digital advertiser.

For many, this has very little relationship with the company’s main work, which is data plans, and there is little relationship between this and their present aim.  It has spent billions of dollars on various deals and arrangements with other companies.  This has had some success, and 10 years ago they started a cable television and internet service, known as Fios.  This meant it was in competition with much larger companies, who had been doing this for many years.  However, all their new deals have not had the same success.  They attempted to get into the cloud service, but put a stop to that due to the strong competition.

Verizon using Supercookies

People in the  industry have noted that it would not take much for them to increase their profits, even with companies such as Facebook and Google have the lion’s share of the market.  AOL’s CEO believes that the future holds all sorts of possibilities for other companies.

Verizon-using-Supercookies-Why-Verizon-Purchased-Yahoo-super-cookies‘Supercookies’ have already caused some difficulties for the company.  ‘Supercookies’ are used to follow users’ browsing habits, and although this is common, Verizon gave the information to advertising companies, and although they had to pay a fine, they also agreed to ensure customers were aware of this.  This meant that those interested in privacy would watch the company closely.  This was made worse by the fact that Verizon did try to fight this.  Giving the user the option to use ‘supercookies’ does not always mean they are safe and once there are complaints they would be back before the Federal Communications Commission.

There are more issues with neutrality and it seems that the company allowed customers to stream for free if they were using one of the companies owned by Verizon.  Yahoo has sports and finance features which are popular.  AOL attracts customers, and also is responsible for the advertisements for MSN.  Verizon also owns other various websites for video and other popular websites.

Verizon have confirmed that they are continuing to purchase websites as they become available and are appropriate for their plans to gain an audience of at least 2 billion users by 2020.   They are interested in the latest technology where many things, including home features are connected to the web.  Others agree that with Google and Facebook having much influence, having another company involved in the same activities is not a bad thing.  Recently these other companies reported good results, which shows they may be growing stronger, making it more difficult for a third company to join this elite group.

The Combination or Yahoo and AOL

The Combination or Yahoo and AOL

The purchase of Yahoo seems to have been a good deal for Verizon.  For the price paid they gained more than 1 billion additional users.  In comparison to other sales, such as Linked In, which was recently sold and Twitter, they have done well.  They also managed to unite AOL and Yahoo.  For a long time this union seemed unachievable.  We don’t know how this combination will work, but it is expected that there is a possibility that their profits will show increases.  It seems that Verizon has increased the profits of AOL and if they can do the same for Yahoo, it may be a success.

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