Verizon is planning to take a $4.6 billion write down on Oath, its fruitless combination of AOL and Yahoo under one roof, as its media division fails to grow digital advertising revenue.
The write down, expected to be reflected in its fourth quarter financials, was shared in a filing with the Securities and Exchange Commission on Tuesday.
“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,” the company said in its filing. “These pressures are expected to continue and have resulted in a loss of market positioning to our competitors in the digital advertising business.”
Verizon said the goodwill balance of Oath, reflecting the branch’s intangible value, will be about $200 million after the write down — a distinct drop from the $9 billion Verizon paid to acquire both AOL and Yahoo in recent years.
The merging of the two companies under Oath, initiated after Verizon added Yahoo to the fold in 2017, has been shaky from the start. Oath’s attempt to take on major digital advertisers like Facebook and Google has largely been in vain to this point, however, despite combining two legacy names in online media. The company accounts for less than 5 percent of U.S. online ad sales, according to the Wall Street Journal.
Oath CEO Tim Armstrong stepped down in October — the same month Oath reported a nearly 7 percent drop in year-over-year revenue, hitting $1.8 billion for the quarter.