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In 2017, Verizon apparently had all the necessary components to launch a legitimate challenge to the Facebook-Google duopoly.
In terms of technology and multimedia assets acquired in the 2015 acquisition of AOL and the acquisition of Yahoo 2017 – an amalgam now known as Oath – Verizon planned to use its rich subscriber data for targeting. powerful advertising. Tim Armstrong, Verizon's Media and Advertising Sector CEO, Oath, spoke openly about the duopoly challenge.
More than a year later, Oath's placement in the advertising industry seems more uncertain than ever. Armstrong is in talks to leave the company, according to sources close to the case. And Verizon plans to integrate some of Oath's business into big business.
"The goal was to challenge Google and Facebook," Business Insider told a former Oath employee who worked in the communications field. "No one in the industry thinks he is a competitor."
In fact, the integration between AOL and Yahoo has never been solid, according to former AOL employees who spoke with Business Insider.
Dysfunction at Oath, according to these employees, can be attributed to three main business problems: Yahoo's culture, high turnover rate of employees and an inconsistent strategy at Oath.
Culture Wars
No merger is transparent. It is expected that there will be some discomfort when you join two or three separate companies.
Yet, cultural differences caught the attention of AOL employees as soon as Verizon acquired the web pioneer in 2015. An anecdote about the first day of work of Tim Armstrong, CEO of AOL, sums up the difference between the two. companies.
When Armstrong showed up at Verizon's office the first day after the merger, according to an employee who was present at the time, he was friendly. Verizon, on the other hand, was an activist and security came out because they did not know who he was.
In the early days, AOL's tight-knit family culture crumbled as Verizon's telecom environment took over, according to former AOL insiders.
However, the inherent cultural differences between AOL and Verizon were not insurmountable. "Verizon has made an effort to value our business," said a former senior executive at Oath.
According to employees, the acquisition of Yahoo in 2017 profoundly influenced the culture in Oath and hindered integration between the AOL and Yahoo factions.
Yahoo and AOL were just not a good mix
According to the employees, AOL felt like a family, friendly and working for a common good. Working at Oath with Yahoo felt mechanical and fierce.
And the differences in philosophy between the two companies manifested themselves in their divergent business approaches. According to one employee, the practice of scanning Yahoo.com and AOL.com email addresses by email has been developed and developed by Yahoo. "This was put on Tim Armstrong, not something that he developed."
These cultural challenges, however, can be attributed to different acquisition histories of both societies.
The Verizon-AOL acquisition in 2015 took place over a one-year period and the leaders of both companies had plenty of time to plan and strategize. Verizon bought Yahoo within 90 days of an auction without strategy sessions, according to a source familiar with the situation.
Essentially, the strategy took place in real time over the past year.
Leadership turnover
Oath's management team never seemed to be strong. Of the seven members of the management team, three began their duties in 2018.
Vanessa Wittman, chief financial officer of Oath, joined Oath in January, Guru Gowrappan, president and CEO, joined the company from Alibaba in April, and Natalie Ravitz, the communications manager, was hired in June.
Now, Oath's management team is changing again with the decision to integrate parts of Oath's business with Verizon and the anticipated departure of CEO Tim Armstrong.
Bob Toohey, Armstrong's long-time CEO and confidant, left the company last week, and CFO Vanessa Wittman and communications director Ravitz plan to leave the company in the coming weeks. .
Next to Suite C, Oath has been a revolving door for other executives and many positions have not been replaced.
Simon Khalaf, who was at the head of Oath's media brands, ended the role in April and his position is now gone. The Marketing Director position, recently held by Allie Kline, has not been replaced. And the role of Revenue Officer, held by John Devine until June, was also removed. Below the top level, many employees have been laid off in the past year.
According to employees, AOL was decimated and this turnover caused malfunctions.
"Nobody wants to take creative risks"
And the fear of constant layoffs has affected the morale of the company. After the acquisition, thousands of employees were deleted at AOL and Yahoo.
"Work in a difficult environment," said the former communications employee. "No one wants to take any creative risks, any mistake on your part would be:" I'll be on the list of redundancies ".
An inconsistent strategy at Oath also posed a challenge to employees. Messaging has changed from week to week and has slowed integration, according to the interior.
"At the time of taking the oath, I could not define the strategy," according to the former communications employee, who said that in their new venture, they could clearly set priorities for their company.
This is the criticism that is also recognized by the industry at large. "The vision is confused, the strategy is not clear," said a large advertising buyer at Business Insider in July. "They are a jack of all trades, but it's hard to discern what they're mastering, if it's there."
Another external site, another integration, another strategy
Senior management started working to create a coherent strategy.
In August, news of a new integration was communicated to company staff. At a retreat led by 200 employees at the Sunnyvale, California, Yahoo campus, employees learned that business functions – finance, human resources, communications, legal and informatics – would be transferred to Verizon. according to sources close to the file.
During this retreat, leaders spent two days defining the new strategy around their six key areas – sports, news, finance, entertainment, home and email. Next week, Oath will launch the new advertising platforms it has been working on for a year, according to a source with knowledge in the field.
Lowell McAdam, former CEO of Verizon, spent his last day of work retired. McAdam was Verizon's CEO since 2011 and oversaw the acquisitions of AOL and Yahoo. Verizon's new CEO, Hans Vestberg, has not talked much about the company's oath strategy since taking office in August.
And Verizon will not comment on recent reports on integration. "We do not comment on speculation and have no announcements to make," Verizon said in a statement to Business Insider, leaving Oath's future as dark as ever.
If you have information you would like to share, contact Abby Jackson
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