[Yahoo CEO Marissa] Mayer added, “Yahoo and AOL popularized the Internet, email, search and real-time media. It’s poetic to be joining forces with AOL and Verizon as we enter our next chapter focused on achieving scale on mobile. We have a terrific, loyal, experienced and quality team, and I couldn’t be prouder of our achievements to date…
A lot of people are focused on the personalities (and compensation) involved—after all this is Yahoo CEO Marissa Mayer, a superstar, and AOL CEO Tim Armstrong of “distressed babies” fame. Me, I keep wondering what in the hell the shape of the new entity will be.
Tim Armstrong, CEO of AOL, said: “Our mission at AOL is to build brands people love, and we will continue to invest in and grow them. Yahoo has been a long-time investor in premium content and created some of the most beloved consumer brands in key categories like sports, news and finance.”
Google has search. Facebook has the social network. Twitter has the angry social network. Microsoft has the office. Apple has user experience. Amazon has commerce, publishing, and the cloud. But what in God’s name does VerizAolHoo have? There’s a recent interview by David Gura with Tim Armstrong, where he says that, “We’re at the early stages of the content era,” which…hmm. I mean I thought we were roughly in century six or seven of the content era. He probably means video? “Content” is a very suspicious word when it comes from a CEO’s lips. It often means journalists are about to be fired.
And then there’s a Bloomberg West interview where an analyst says that the Yahoo acquisition comes down to “distribution.” Distribution is one of those equally terrible words—another is “reach”—that people nod at sagely. But all it means is “can send media stuff, and ads, to lots of people and they might look at it.” That’s distribution.
The thing about the Internet is that all of us have distribution now. You personally have the ability to distribute billions of emails to people from your email account, but there’s very little chance you’ll be able to get them to pay attention, and you’d be more likely to get blocked as a spammer. Katy Perry has great distribution and reach through her insanely popular Twitter account—nearly 91 million followers. She’s young, rich, and has a cat named Kitty Purry. She’s killing it at distribution.
With more than 100 million wireless customers, a shared view of the importance of mobile and video ad tech, a deep content focus through AOL, Verizon brings clear synergies to the table. And with their aggressive aims to grow global audience to 2B users and $20B in revenue within the mobile-media business by 2020, Yahoo’s products and brand will be central to achieving these goals.
Clear synergies! Maybe the way to see this whole thing is that VerizAolHoo is one of those giant old-school conglomerates, increasingly focused on reaching the small screen in your pocket, and getting you to give it money through that screen (it works—Verizon has a $230 billion market cap, which is definitely more cap than most of us). We’re not meant to understand what they are.
It used to be that conglomerates were pretty obvious—one might own coffee farms, jet engine manufacturers, and a department store, and they had acronym-names like ITT or powerful names like Consolidated Undulating Prong. Postmodern industrialism is sort of different—you end up owning all these weird abstractions in the form of media and services, which you call “brands,” and the brands together form a kind of hidden network, and then you create ad products—which are software—inside them. You have to look at the bottom of the screen to see who owns CelebrityBowelMovements.guru or ZimZamZoom.info. The conglomerate owners can distribute that ad software inside the media network inside the cellular network via Internet protocols (and we call it…THE ARISTOCRATS!)
That is, media “brands” are an engine for shipping software, which, due to a crisis of creativity in the media industry, tends to be in the form of advertising. Meanwhile big tech companies often use their software brands to ship more software—Windows + Office, iOS + iTunes, Facebook + Messenger. And ads hitch a ride along the way.
The tricky thing with a giant media conglomerate so dependent on its media brands, like AOL and Yahoo are dependent, is the problem of brand dilution. The big competitors—Facebook, Google—you know what they are even if you don’t understand them. Which means consumers know, and brand advertisers know, and ad agencies and salespeople know, too. No one has been able to say definitively what Yahoo is, for years—is it a media company or a software company? The answer, in that “grow global audience to two billion users” line, seems to be “it’s basically media-ish.” So we finally got an answer! We know what Yahoo is, and now we’ll find out more about what Verizon wants to be, too.
