A Combined Verizon/Yahoo Makes a Lot of Sense

A combined Verizon/Yahoo makes a lot of sense,” according to Shar VanBoskirk, Vice President and Principal Analyst, CMO strategy, at Forrester, as “Verizon wants Yahoo to fill out its omnichannel content and advertising play.”

But much depends on how Verizon leverages its content assets and creates a well blended strategy. With each of the assets having a unique place rather than cannibalizing  one another.  For instance the Yahoo News in most parts of the world has a big traction and it is assets like this Verizon need to re-invent and tweak it further.

If executed in a customer-first way, the deal will be really valuable to consumers and to advertisers, VanBoskirk explained in an earlier blog post. “For all the wobbliness of Yahoo's brand identity, the Yahoo brand still holds a lot of consumer-affinity. Consumers like the Yahoo brand,” VanBoskirk wrote. “Depending on how Verizon plans to leverage that, it could be a nice boost in an industry like telecom where most subscribers disdain even the providers they are quite loyal to.”

Forrester's VanBoskirk believes that Yahoo is most valuable in parts, and frankly the parts that are the most valuable are its data assets, not its existing content as some other analysts have suggested. “The more access to customer data Verizon has -- online through Yahoo and AOL, in home via cable boxes, on mobile via smart devices -- the more targeted it can be with advertising and sponsored content or product placements across those same devices,” VanBoskirk explained. “This allows Verizon to create better ad products which is competitive against primarily online giants such as Google, and creates a better user experience which is competitive against other cable and telecom providers.”

“Verizon needs to rethink Yahoo’s place in its New Businesses organization,” Dan Bieler, Principal Analyst, enterprise telecoms, at Forrester, adds. "Yahoo and its sub-brands will not automatically slot into Verizon’s digital life portfolio, which comprises AOL and its sub-brands. Apart from any cultural integration challenges, mobile must become an even greater focus area and product innovation cycles must speed up.”

Moreover, it is not clear what the deal means for Yahoo’s international activities, Bieler points out: “If Verizon ultimately decides to exit from Yahoo’s international activities, Yahoo’s appeal as advertising platform will decrease amongst marketers looking for online platforms capable of delivering a glocal pitch.”