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Does the end of road for Yahoo! mark a new beginning for Verizon?
It's probably just a fading memory now, but Yahoo was for long the doyen of the internet industry.
It's probably just a fading memory now, but Yahoo was for long the doyen of the internet industry. It marked the beginning of the dotcom explosion and shaped the industry the way we know it today. A pioneer of the display advertising business, has now been reduced to nothing more than a relic. There are numerous reasons as to why it faltered and finally fell, the internet is rife with speculations on how Yahoo could not keep up with time even when the disruptors were standing right there, staring Yahoo in its face.
So cutting to the chase, what does this decision mean to Verizon? Earlier last year, Verizon had acquired another internet giant, AOL Inc. in a $4.4 billion deal. So now, the question surfaces as to why would a communication service provider queue up to buy erstwhile internet media giants? It is here that you should get an inkling of Verizon's brilliant business plan- when most service providers were looking to offer cheaper tariff, better bundling and competitive value added services, Verizon had already read the writing on the wall. Verizon has strategically been making inroads into the mobile video and advertising business. Entering into the crowded online video marketplace without a sound platform spells doom for a communication service provider. It is here that Verizon's internet media acquisition will bear fruit. With AOL and now Yahoo, it wouldn't be very surprising if Verizon emerges as the lone market leader in the internet and telecommunications industry.
The learning curve for communication service providers (CSP's) should get steeper here, they need to move beyond just selling access to their consumers. Verizon is lucky to have most of the work cut-out for them already, however execution will play the pivotal role if they want to come up as a serious contender in the online content industry to challenge the likes of the reigning market supremos like Google and Facebook. With niche and intriguing content and social platforms, customer acquisition and engagement becomes easier, although Verizon will have to huff and puff to get consumers acclimatised to their own platform. With products like Tumblr and Flikr in their kitty, they are now in a unique position to monetize their data in a big way. Verizon is already in the possession of an end-to-end ad tech stack through their purchase of AOL, and Yahoo's acquisition will now substantially improve AOL's first-party data offering.
The reason why Google and Facebook have flown past Yahoo and Microsoft is because they are better at delivering what people wanted. The telecommunications industry is now nearing saturation and most of their service offerings are identical to their competitors. A saturated market, low consumer satisfaction and diminishing margins are detrimental to the health of any industry. It is now that the service providers need to look for a novel way to turn their fortunes around and Verizon has successfully demonstrated how CSP's could approach newer operating models.
The Digital Transformation in Telecoms MENA conference will focus on how traditional communication service providers can reinvent themselves as major stakeholders in the digital environment and survive in the immensely competitive telecommunications market today. The two day conference will be held from 21st to the 22nd November 2016 and will bring together prominent industry leaders and peers to discuss what the future holds for telcos.
Brought to you by the Digital Transformation MENA 2016 conference team. Visit the link below to know more about the conference.
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