Verizon Inc. (VZ) CEO Lowell McAdam isn't done dealing. Just three months after closing the data breach-plagued acquisition of Yahoo Inc., McAdam said further content deals are possible.
"Well, I wouldn't be surprised if sometime before the end of September you
hear about one of them," McAdam said on Thursday, Sept. 14, at the Goldman Sachs Communacopia Conference in New York. The chief executive also said Verizon had "moved on" from potentially acquiring a cable company such as Charter Communications Inc. (CHTR)
Verizon is aiming to triple sales from its media businesses over the next two to three years to $20 billion. To do that, the telecommunications company is investing in the advertising technologies that it acquired when it bought AOL Inc. in 2016 and finally closed its purchase of Yahoo in June after the revelation of two data breaches forced a months-long delay in the deal as well as a price reduction of about $350 million.
The two companies have been combined into Oath, a unit that encompasses 50 media and technology brands including HuffPost as well as a broad advertising technology business run by Tim Armstrong, the former AOL chief executive who spent the early part of his career at Google, a unit of Alphabet Inc. (GOOGL) .
Coming full circle, McAdam told a packed hall of investors that while Verizon doesn't expect that it will overtake Google, it can siphon off some market share from the world's leading recipient of digital advertising.
"Look, we're not here saying we're going to slay Google," McAdam said. "But that market, you look at Facebook's (FB) numbers, Google, that market's growing pretty well."
At present, Verizon's digital ad sales are around $7 billion a year. McAdam said Verizon can reach $10 billion by 2010 though Armstrong has put the company's target at $20 million. Rather than buying another wireless carrier or getting into cable TV, Verizon opted to invest heavily in ad technology. AOL cost $4.4 billion, while Verizon paid $4.5 billion for Yahoo's core businesses.
Verizon's target audience for advertising has gone from 5 million users of its Fios video service to 115 million wireless customers, and potentially to a global audience of 1.3 billion users, when Yahoo and AOL are added to the mix, McAdam said.
"Whether you're on the website or you're on your phone, better-targeted ads [are] going to be better for the advertisers and better for consumers," McAdam added.