NEW YORK (CelebrityAccess) — Telecom giant Verizon conceded on Tuesday that its media brand Oath, which includes Yahoo and AOL, was effectively worth nothing.
In an 8-K filing with the SEC on Tuesday, Verizon said that it was taking a $4.6 billion write-down on Oath, the media venture they launched in 2017.
According to the company’s filing, Verizon had previously reported the “goodwill” value of the company, which includes intangibles such as its reputation and brand value, at $4.8 billion, meaning Oath is now worth a grand total of about $200 million in Verizon’s estimation.
“Verizon’s Media business, branded Oath, has experienced increased competitive and market pressures throughout 2018 that have resulted in lower than expected revenues and earnings. These pressures are expected to continue and have resulted in a loss of market positioning to our competitors in the digital advertising business. Oath has also achieved lower than expected benefits from the integration of the Yahoo Inc. and AOL Inc. businesses,” Verizon said in their filing.
The news of Oath’s precipitous fall comes just three years after Verizon made a series of splashy media deals, including the purchase of AOL in 2015 for $4.4bn and Yahoo!, which owns the Huffington Post last year for $4.5bn.
At the time of the AOL sale, Tim Armstrong, who was chairman of AOL and transitioned to Oath, said: “If you look forward five years, you’re going to be in a space where there are going to be massive, global-scale networks, and there’s no better partner for us to go forward with than Verizon. It’s really not about selling the company today. It’s about setting up for the next five to 10 years.”\
According to Verizon, the new valuation for Oath will spell layoffs for many of its employees. According to Verizon’s filing, more than 10,000 employees will part with the company as part of a “voluntary separation program” with about half of that figure heading out the door this month. The remainder will be out by June 2019.