Verizon Communications (VZ - Free Report) recently announced that it will integrate its mobile video service, Go90 under Oath.
Go90 was launched in 2015 by Verizon, specifically for the young generation. The app came up at a time when media and communications companies were focused on launching their own applications and services for digital video. However, it failed to stay ahead in the intensely competitive market in terms of revenue growth. Notably, in January 2017, Verizon announced the layoff of 155 employees working on its struggling Go90 mobile platform.
Oath is Verizon’s newly-formed company under Media and Telematics organization. It is Verizon’s digital content and online advertising suite, which oversees Yahoo and AOL, including more than 20 brands like Yahoo News, HuffPost, Engadget, TechCrunch, MAKERS, Tumblr, BUILD Studios, Yahoo Sports, Yahoo Finance, Yahoo Mail and others. Verizon acquired AOL in June 2015 and the core businesses of Yahoo! in June 2017. In October 2017, Verizon announced the availability of Go90 content across some of its Oath brands.
Verizon is systematically diversifying itself as a major player in the digital content and online advertising space. It has inked a five-year digital streaming deal with National Football League (NFL). The telco paid approximately $2.25 billion to stream NFL’s content on its digital and mobile media platforms. Additionally, Verizon signed an extended carriage deal with A+E Networks to broadcast the latter’s programming in its digital media suite. Other than A+E cable networks, games like National Women’s Soccer League will also be streamed on Yahoo Sports and Go90 platforms. The respective contents will be broadcast under Verizon’s Oath brand.
In fourth-quarter 2017, Verizon’s Oath revenues were $2.2 billion, up approximately 10% from third-quarter 2017, driven by increased customer advertising spending during the holidays. Verizon expects a normal seasonal trend in Oath revenues between fourth-quarter 2017 and first-quarter 2018. Verizon projects more than $20 billion in revenues by 2020.
With Oath, the telco has managed to reach more than 200 million mobile and digital viewers in the United States. On the back of Oath and other prospects, Verizon intends to compete against dominant players in the online and digital video advertising market, which includes Facebook (FB - Free Report) , Alphabet Inc. (GOOGL - Free Report) and Autohome (ATHM - Free Report) .
Zacks Rank & Price Performance
Verizon carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Verizon’s shares have put up an impressive price performance. In the past three months, shares of Verizon have rallied 10.6% compared with the industry’s gain of 4.4%.
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