Verizon’s media and advertising business Oath (the combined AOL and Yahoo) saw its revenues fall during the third quarter, and it’s impacting the company’s long-term projections.
Oath revenue for the third quarter totaled $1.8 billion, down 6.9% year-over-year.
Verizon CFO Matt Ellis blamed the decrease on revenue pressure from search and desktop usage, which he said is more than offsetting positive growth in mobile usage and video products, including Verizon’s distribution partnership with the NFL.
“Because search and desktop products make up the majority of the Oath business, and we believe pressure in those sectors is likely to continue, we do not expect to meet our previous target of $10 billion of revenue in 2020. The leadership team at Oath is focused on returning to revenue growth by completing the integration of the legacy AOL and Yahoo advertising platforms by year end, implementing initiatives to realize synergies across all of our media assets, and building services around our core content pillars of sports, news, finance and entertainment,” Ellis said during today’s earnings call.
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Ellis praised the quality of the teams and assets within Oath but said the business growth does not yet reflect that.
Ellis said that the technical skills at Oath are a value that has been harder for many to see. He said that Oath technologies including artificial intelligence, augmented reality and virtual reality are being reused across all of Verizon, and that it is providing “significant value” for the entire company.
Away from its media business, Verizon also saw declining results around its traditional video business. During the quarter, Verizon lost 63,000 Fios Video connections and its total wireline revenues decreased 3.7% to $7.4 billion.
Mike Dano contributed to this report.