Verizon Writes Down $4.6 Billion from AOL and Yahoo Acquisitions

Verizon Writes Down $4.6 Billion from AOL and Yahoo Acquisitions

Verizon Writes Down $4.6 Billion from AOL and Yahoo Acquisitions

It bought Yahoo's internet businesses for $4.5 billion past year after acquiring AOL, the digital media group, for $4.4 billion in 2015.

Since that time, Google and other internet giants like Facebook have continued to gobble up advertising dollars to the detriment of Oath, and by extension, Verizon.

Verizon Communications Inc said on Tuesday it will take a $4.6 billion charge related to its Oath media assets - which includes digital media sites Yahoo and AOL - and a severance charge of up to $2.1 billion for voluntary buyouts in the fourth quarter. "These pressures are expected to continue and have resulted in a loss of market positioning to our competitors in the digital advertising business".

FBN's Cheryl Casone on Verizon's reorganization plans under CEO Hans Vestberg. Before the re-accounting Verizon said the Oath brand's goodwill valuation was $4.8 billion.

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Oath also has "achieved lower-than-expected benefits from the integration of the Yahoo Inc. and AOL Inc. businesses", Verizon said.

Verizon combined AOL and Yahoo into a new subsidiary called Oath whose only claim to fame was that it snuffed out two of the most important brands from the Internet boom's heyday.

"In connection with Verizon's annual budget process in the fourth quarter, the new leadership at both Oath and Verizon completed a comprehensive five-year strategic planning review of Oath's business prospects resulting in unfavorable adjustments to Oath's financial projections", Verizon told the U.S. Securities and Exchange Commission in a recent filing.

Verizon said Monday that it had offered voluntary buyout deals to 44,000 management employees, and that 10,400 of the managers had accepted the offer. Almost half of those employees will exit in December, with rest to leave by June 2019.

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