Armstrong says AOL and Yahoo are under Oath
Verizon Communications plans to merge its AOL and Yahoo divisions into a new media company called Oath. AOL CEO Tim Armstrong shared the news on Twitter after a published report disclosed the name of the new company late Monday afternoon.
This June, Verizon is scheduled to close on its purchase of Yahoo, valued at $4.48 billion excluding Yahoo’s cash. Once the deal is complete, Verizon is expected to combine Yahoo and AOL under the Oath brand, run by EVP Marni Walden. Armstrong is also likely to play a major role in running the new company, and has reportedly been interested in combining AOL and Yahoo for years having tried unsuccessfully to merge the two companies when they were both independent.
Together, AOL and Yahoo own a number of prominent brands, including The Huffington Post, TechCrunch, Engadget, Tumblr, Flickr and MovieFone. As Armstrong pointed out on Twitter, these and other future Oath brands engage more than 1 billion consumers worldwide.
Verizon has made it clear it sees ownership of content as the way to leverage its networks in the U.S. and tap markets outside the country where it does not own spectrum. In addition to the two media acquisitions that will create Oath, Verizon has purchased a 24.5% stake in AwesomenessTV, which is controlled by DreamWorks, and has invested in its Go90 mobile video service that streams original content, including the popular teen drama “Guidance.” So far, Go90 has fallen short of Verizon’s expectations, but the company apparently remains completely committed to the mobile app. Verizon has not said yet whether Go90 will become part of Oath.
The creation of Oath does not necessarily mean Verizon will eliminate the AOL and Yahoo brands, but it does mean the companies will operate and report financial results separately from its parent company.
Verizon just completed a corporate restructuring, which took effect April 3. The company has segmented its businesses into Media and Telematics; Customer and Product Operations; and Network and Technology operations. Former Ericsson CEO Hans Vestberg is heading up the Network and Technology division, and is reporting directly to Verizon CEO Lowell McAdam.
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