Verizon has agreed to buy Yahoo for $4.83 billion dollars. A move they may have had in mind ever since they acquired AOL. Verizon has acquired these digital advertising powerhouses in an effort to compete with the likes of Google and Facebook. Yahoo just might be the final piece of the puzzle to put them in the arena to compete with the major players in a few years.
The key piece Yahoo brings is an audience of a billion-plus customers. It takes years to build an audience to this scale. In an industry where everything can completely change in a few years, Verizon can't afford to wait. The combined audience of Verizon/AOL/Yahoo will reach 2 billion.
Yahoo's audience is priceless to Verizon because of AOL's programmatic advertising technology. AOL already has a strong programmatic ad platform in place. In fact, it accounts for more than 50% of AOL's total ad revenue today. Adding in Yahoo's user information (along with Verizon's wireless customers) will provide the global reach and content channels they are lacking. This creates opportunities for better data and more ad positions for auction. If integrated well, Verizon could be a future leader of digital advertising. Just imagine the potential opportunities...
- Beginning with a phone purchase, phones could be tagged with the purchaser's interests based on Verizon's mobile data, AOL's programmatic advertising technology and Yahoo's user profile information.
- In combination with this data, ads could also be served up with location data or the type of internet connection (Wi-FI/3G/4G) on global placements such as Yahoo (Finance, Sports, News), Tumblr, or MapQuest.
- All of this data can then be connected across devices creating a cross-screen, personalized and dynamic experience for consumers and, therefore, relevant and highly-valued ad buys for advertisers.
Harnessing the power of its ad technology and vault of data, Verizon can effectively become the major player the digital advertising industry (but don't expect it to happen next year).