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Verizon Pauses Facebook Ad Displays, Joins Protest Bandwagon

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Verizon Communications Inc. (VZ - Free Report) has joined the mass protest campaign by advocacy groups over the handling of controversial posts and hate speeches by Facebook, Inc. (FB - Free Report) and suspended its advertising displays on the social media platform. With this, the carrier has joined a long list of diverse companies who have voiced their dissent on the raging issue, in order to exert pressure on the social media behemoth to adopt stricter measures against racist and hateful content. 

The protest campaign has been initiated by the Anti-Defamation League, the National Association for the Advancement of Colored People and the Color Of Change. It urges firms that have significant advertising displays on Facebook to take a tough stance against posts that incite racism and spread disinformation by stopping all promotional expenditures throughout July. The advertising boycott is expected to significantly dent revenues of the company, thereby likely forcing it to amend its policies regarding such content on the platform.

Facebook has already made an outreach to the advertisers and promised to have a look into this matter without pledging any specific change. It has agreed to work in unison with civil rights groups to chalk out a workable solution that is acceptable to all. However, the growing unrest has drawn in companies like ice-cream maker Ben and Jerry's and outdoor brands — The North Face, Patagonia and REI — to the mass advertising boycott program.

The entry of a giant like Verizon is likely to add significant weightage to the campaign. On its part, the carrier has clarified that strict compliance policies and zero tolerance against hateful content have prompted it to hit the pause button for advertisements. The voice of dissent is likely to encourage other blue-chip firms to follow its footsteps and exert pressure on Facebook to fall in line.

Over the years, Verizon has systematically diversified itself as a major player in the digital content and online advertising space. The company wrote off a majority of its media business — Oath — which includes Yahoo and AOL, due to lower-than-expected performance. Verizon Media replaced the Oath brand. The company has spurred technological innovation and economic development, including introducing mobile data and making the ecosystem more pervasive with 4G LTE. The company has now embarked on a new operating structure under Verizon 2.0, with an operating model closely aligned with the evolving customer needs. The business transformation is likely to propel the growth engine of the company as the industry is witnessing a major upheaval.

With one of the most efficient wireless networks in the United States, Verizon continues to deploy the latest 4G LTE Advanced technologies to deliver faster peak data speeds and capacity for customers, driven by customer-focused planning, disciplined engineering and constant strategic investments. The company has been aggressively marching ahead to expand its fiber optics networks to support 4G LTE and the upcoming 5G wireless standards as well as wireline connections. The company remains focused on making necessary capital expenditures in order to support increased demand for network traffic. At the same time, Verizon is focusing on continued build-out of its 5G Ultra Wideband network, deployment of significant fiber assets across the country and upgrades to the Intelligent Edge Network architecture.

However, shares of this Zacks Rank #3 (Hold) company have lost 5.2% over the past year compared with the industry’s decline of 1.4%.



Some better-ranked stocks in the industry are T-Mobile US, Inc. (TMUS - Free Report) and Telenav, Inc. (TNAV - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

T-Mobile has a long-term earnings growth expectation of 18.9%. It delivered a positive earnings surprise of 19.4%, on average, in the trailing four quarters.

Telenav delivered a positive earnings surprise of 108.3%, on average, in the trailing four quarters.

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