Verizon said Tuesday that it's killing off its Oath media brand exactly a week after it told federal regulators that the multibillion-dollar company it built from its purchases of Yahoo and AOL was virtually worthless.
In a chipper, "we're excited" statement, K. Guru Gowrappan, who succeeded Tim Armstrong as chief executive of Oath in October, said "Verizon Media Group will replace the Oath brand" on Jan. 8. (Yahoo's iconic exclamation point isn't part of the new name.)
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In response, Verizon Communications Inc. confirmed the same day that it was reorganizing itself to create three divisions: Consumer, Business and Verizon Media Group/Oath.
But "Oath" disappears in Gowrappan's statement on Tuesday, which makes no mention that it had tanked — something Verizon acknowledged last week when it told the Securities and Exchange Commission that it was taking a $4.6 billion charge on Oath's goodwill balance. ("Goodwill" is calculated by subtracting the current fair market value of the assets and liabilities of an acquired company from the price that was paid to buy the company.)
Because Verizon had most recently assessed the Oath brand at $4.8 billion, the writeoff meant Verizon valued Oath — including Yahoo.com and AOL.com and subsidiaries like HuffPost and TechCrunch — at just $200 million on paper. Oath also sells the display advertising on Microsoft's MSN sites in nine countries.
Verizon paid $4.4 billion for AOL in 2015 and $4.5 billion for Yahoo in 2017.
Oath was supposed to be its big push into web-driven advertising, but the business never took off. It reported $1.8 billion in revenue in the third quarter of 2018, which ended Sept. 30, well short of a course that would hit its stated goal of generating $10 billion a year in revenue.
Google and Facebook control about 58 percent of the U.S. digital ad market. The market research company eMarketer projects that Oath will account for just 3.3 percent of that market in 2018, down from 4.1 percent last year.
It's the second big declaration of defeat by a media conglomerate in just the last two months. In October, Tronc, which was created in 2016 when Tribune Co. rebranded its spun-off newspaper division, said it was returning to calling itself Tribune Publishing Co.
As with Tronc — which was short for "Tribune Online Content" — the Oath brand drew widespread criticism when it was unveiled in April 2017:
CORRECTION (Dec. 21, 2:25 pa.m. ET): An earlier version of this article mischaracterized the relationship between Oath and MSN.com. MSN.com is a commercial partner of Oath, which sells the site's display advertising in several countries. It is not a subsidiary.