If companies could vote on Verizon's decision to acquire Yahoo's core assets, those supporting the back-end pipes that run ads, video and content across the Web would give the deal a thumbs down.
While advertisers see the benefits in aggregating data across devices and platforms to serve ads, content and video, those on the telco side of the business like Eric Handa, CEO at APTelecom, a telecom and fiber consulting business, are scratching their heads over the $4.8 billion deal announced earlier this week. They have a completely different take on the acquisition.
"If you took $5 billion in capital expenditures and built out cloud-based platforms like data centers for fiber and terrestrial you could get a lot of coverage for the investment, but you're not getting a whole lot of building blocks to increase connectivity and reach through this acquisition," Handa said. "I'm sure a lot of people go to Yahoo Sports, but why wouldn't you go to ESPN directly to get the content?"
Handa, who just doesn't see benefits for Verizon, points to the challenge that today Yahoo leases the infrastructure to run video and other data across the Web.
Perhaps that's the draw for Verizon -- which owns its infrastructure to host live video streams and ad serving on desktop and mobile, but lacks the original content and a varying amount of data it needs to rebuild AOL, which it acquired in 2015. Even if that's the case, Handa believes Verizon is overpaying for Yahoo's assets.
What about the "intelligent agent" that Verizon will launch, built into a cable box from Tumblr and Yahoo Messenger functions, Shar VanBoskirk, Forrester Research VP, principal analyst, writes in a research note.
VanBoskirk sums it up in an email to Search Marketing Daily: Value isn't in being a carrier (telco) anymore but in creating customer experiences, Verizon sees this and is broadening its value, its data and infrastructure enables advertisers the ability to reach target audiences in an omnichannel way across mobile, online, TV, which is something traditional competitors like Comcast and AT&T, as well as big online publishers such as Google and Facebook can't do.
United we fail? Handa isn't the only one who thinks Verizon took a wrong turn. "I know everyone's thinking about the footprint and impressions, but Verizon shouldn't buy Yahoo," according to a source who asked for anonymity. The company supports Internet infrastructure services. "User behavior and traffic changes so quickly that impressions could easily disappear in a year."
Ed Camargo, VP of paid media at PMX Agency, offers an alternative perspective. He points to mobile, traffic, reach and data as the reasons for the deal.
Marketers are trying to map out a consumer's journey on multiple devices -- from the first search on an engine or Web site to the purchase and beyond -- and Verizon's acquisition of Yahoo means connecting those dots, Camargo says. It's something Google has been doing for about a year.
If this works, Camargo believes Verizon will have the ability to map a person to a specific journey on a mobile device with about "95% accuracy."
Camargo expects new privacy implications for Verizon and advertisers that want to track and attribute media to a specific sales because the data becomes much more accurate, although all parties are quick to hire experts to remove specific information in the data.
Here's the catch to putting too much emphasis on the data. "The Federal Communications Commission (FCC) is writing new privacy rules that prohibit the use of consumers’ information for anything except the marketing of network services without an explicit opt-in," VanBoskirk explains. "Republican legislators say that these rules constitute overreach by the commission. But if Tom Wheeler, the FCC chair, has his way or if the November 2016 election shifts opposition, and the expansive privacy code passes, Verizon’s $9.6 billion AOL and Yahoo data assets lose their worth."