When Verizon (VZ) chose to christen its media and advertising arm as Oath – which houses struggling tech brands AOL and Yahoo which joined the company in the recent past – the new venture and its unconventional name had evoked mixed reactions.
However, the muted performance of Oath since it was created a few months ago proved the skeptics right, to some extent. Less than a month after CEO Hans Vestberg dismissed rumors of a possible spinoff, Oath suffered a setback Friday when its CEO Timothy Armstrong reportedly announced plans to leave the company by next month.
The muted performance of Oath since it was created a few months ago, combining AOL and Yahoo, proved the skeptics right
The exit of Armstrong, who has been tasked to reorganize the fading brands and develop them into a major digital content platform in the lines of Google (GOOG) and Facebook (FB), is likely to cast a shadow over the growth prospects of Oath.
Meanwhile, a statement from the company said Oath will be integrated into the rest of the business, putting speculations of a spinoff to rest. After joining the Verizon team as the CEO of AOL, which was added to its fold about three years ago, Armstrong played a key role in the acquisition of Yahoo a year later.
A spinoff would have benefited Armstrong, who had been keeping a low profile ever since his involvement in the daily activities of Oath was curtailed considerably following a recent reorganization.
Recent developments clearly indicate that Verizon is currently treading a different path to take forward its media and ad business, rather than following the conventional strategy adopted by rivals like AT&T (T). One of the reasons behind the policy shift could be disillusionment over the tedious task of gaining a foothold in the ad and media industry currently dominated by the Silicon Valley tech giants.
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