Verizon hopes to grab ad dollars with Yahoo purchase
NEW YORK — Verizon has a simple goal in buying Yahoo: It wants to challenge Google and Facebook in the huge and lucrative field of digital advertising. But Verizon faces its own challenge in doing so, given that it will be competing against a slew of other companies also looking to break in.
Verizon wants to become a strong third choice for advertisers by adding Yahoo’s popular sites and billion users worldwide to its own media business, which includes AOL and Verizon’s home-grown go90 video service. It can place ads on those sites, and can also combine data from visitors to those sites with AOL’s ad technologies and sales teams, and possibly also personal data from Verizon mobile customers such as location and other information, in order to better target ads at individuals.
Verizon has programs that use mobile-customer data for targeted ads and may combine that with data gathered by AOL and Yahoo. Verizon says customers can choose whether to participate.
Yahoo’s shareholders on Thursday approved the $4.5 billion sale of its key businesses to Verizon. The deal is expected to close by Tuesday. The combination of AOL and Yahoo will cut 15 percent of its 14,000-person workforce, or about 2,100 jobs, said a person familiar with the matter who requested not to be identified discussing details of the cuts.
Yahoo and AOL are “positioned to do better together than apart,” Pivotal Research Group analyst Brian Wieser said.
But he is setting the bar low. While Verizon talks of growth from the deal, Wieser said “not declining would be a success. Five years from now, if the combined entity were the same size as it is today, I would consider that to be successful.”