It was easy to predict that Verizon would end up regretting the $10 billion or so that it had invested in AOL and Yahoo. The two companies used to define the internet, but by the
time the phone company bought them, they were long past their prime.
And no one except Priceline has ever revived a faded consumer internet company — once it’s done, it’s done. Now Verizon has formally acknowledged that it, too, can’t turn AOL and Yahoo around and has written off $4.6 billion of the money
it spent buying the two properties. The playbook from here on out calls
for a series of staff cuts and asset sales, followed by more
writedowns, followed by more cuts, etc. This one contains multiple teachable moments. Just
wishing that there was an alternative to the Facebook/Google advertising
duopoly doesn’t make it so, for instance. Then again, Facebook and
Google can look at the demise of two of the internet’s most powerful
companies and remind themselves that this could be their fate, too.One particular lesson you can take from this even if
you’re not an internet giant, past, present or future: Giant megadeals
don’t belong to the companies that make them. They belong to the
executives that make them. And if those execs leave, the deals can go,
too.
I only "kind of" agree. The problem is CEO and other top management egos. I was there and I saw it before this one. Verizon has made many such mistakes. In my opinion only Seidenberg managed exceptionally well. Many others wanted to be in the "media" business. Fundamentally they were "pole climbers" and not "media moguls" The AoL deal and worse the Yahoo deal made no a bit of sense and the Boards of these entities are generally "politically correct" collections who have no idea about the core business.
Perhaps the new management of Verizon will get it right. They are an entity with certain exclusive assets, frequency bands, that they can monetize in a multiplicity of ways. They are still a monopoly like company, along with AT&T. So focus, focus, focus. I understand how difficult it is to get Directors who know something especially when running a politically visible business, but try to get a few. Reality can be expensive, but at least the new management seems to have same grasp on it.
Let's hope so. I wish them luck.
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