This morning's announcement from Verizon about its bid to purchase Yahoo Inc. for $5 billion comes as no surprise. Under the leadership of CEO Lowell McAdam, the company has been actively putting the pieces in place to undergo a digital transformation--one that will enable the company to earn revenue from digital advertising, largely on mobile devices.
Last fall, Verizon spent $159 million to acquire AwesomenessTV, the youth-focused digital media company owned by Hearst and DreamWorks. And last year's $4.4 billion all-cash deal for AOL has since positioned the company as a programmatic contender, according to analysts.
The company also bought the intellectual property and assets of Intel Media, the digital TV division of the chip maker Intel in 2014. And in late 2013, Verizon acquiredf EdgeCast, a content delivery network, as well as the assets of upLynk, a video streaming company.This most recent acquisition will create the scale Verizon needs to become a true digital advertising platform.
The digital age has rewritten the rules on how businesses should compete. As growth in traditional telecom slows, Verizon had the foresight to adopt a new business model--one that will enhance interactions and engagement with and among consumers, enable new business models, and create new data streams. As an increasing number of consumers amp up their mobile usage, the acquisition of Yahoo will inevitably turn out to be a sound business decision for Verizon. Pundits of this deal argue, why fix what isn't broken? I'm certain former executives at Blockbuster and Kodak would argue otherwise.