Verizon (VZ) to Face Tough Digital Ad Rivals, RBC's Mahaney Tells CNBC
NEW YORK (TheStreet) -- It will be tough for Verizon Communications (VZ) - Get Report to compete in the digital ad space even if its $4.83 billion acquisition of Yahoo (YHOO) is approved, RBC Capital Markets' Mark Mahaney said on CNBC's "Squawk on the Street" Monday.
One of the benefits surrounding Verizon's purchase of Yahoo is that the search engine company's web platform will help the wireless network provider's ad growth. Mahaney is not so convinced.
"The challenge that Verizon is going to have in the future is that online advertising has become a duopoly and actually greater concentration with two names, Google (GOOGL) and Facebook (FB) and that concentration has been rising over time," Mahaney explained.
The "real uphill battle" lies in the fact that online ad revenue growth is a "flat lining percentage or even a declining percentage," he continued.
"If [AOL CEO] Tim Armstrong can just maintain that slice of the pie, there's a win in there but it's not a huge home-run win. But again this isn't a huge home-run acquisition by Verizon," Mahaney commented.
Shares of Verizon are declining by 0.66% to $55.73 and shares of Yahoo are slipping by 2.34% to $38.46 late this morning.
Separately, TheStreet Ratings rated Verizon as a "buy" with a score of A.
The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, expanding profit margins, growth in earnings per share and increase in net income. TheStreet Ratings feels its strengths outweigh the fact that the company has had generally high debt management risk by most measures that were evaluated.
You can view the full analysis from the report here: VZ
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.