Monday, August 1, 2016

For Verizon, Being #3 to Google and Facebook Might Not be a Bad Outcome

Few--if any--observers seem to think Verizon will gain market share against Google and Facebook with its combined AOL-Yahoo business.

“Verizon Communications Inc.'s planned purchase of Yahoo! Inc. for $4.83 billion in cash would make the telecom giant the clear number-three player in the U.S. digital ad market,” says Seth Shafer, SNL Kagan research analyst. “However, gaining ground on Google Inc. and Facebook Inc. could prove difficult.”

Some might argue that being third, and even lagging Google and Facebook by quite some measure is not such a bad outcome for Verizon.

Challenging either Google or Facebook in a serious way might seem fanciful to most observers. But, at a minimum, the new Verizon unit is likely a $4 billion or bigger annual revenues business, which is sort of a minimum for Verizon to bother with.

Also, a market positioning of “we offer an alternative to Google and Facebook” would seem to be sustainable.

source: SNL Kagan

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