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- Verizon explicitly rejected claims it would spin out its digital media business Oath on its second quarter earnings call.
- Recently, advertisers have expressed doubt that Oath will be able to compete with Facebook and Google.
- Outgoing CEO Lowell McAdam said Oath is on schedule with its planned integration.
Verizon is standing behind Oath.
On its second quarter earnings call it issued its most explicit repudiation to date of rumors that it may spin the digital media unit business out of Verizon.
“The questions around Oath, I don’t know where they are coming from,” outgoing CEO Lowell McAdam said. “There is no intention of spinning out Oath.”
That comment seemed to be a response to recent reports questioning Oath’s longevity with Verizon.
Advertisers told Business Insider in June that they have started to doubt whether Oath will eventually be a digital ad powerhouse that can compete with Facebook and Google. The sluggishness in Oath’s integration and its ability to quickly compete against the duopoly is worrying to advertisers.
“The vision is muddied, the strategy is unclear,” a top ad buyer said. “They are a jack-of-all-trades, but it’s hard to discern what they are masters of, if anything.”
And other insiders said that Oath CEO Tim Armstrong has explored options to spin the business out of Verizon, The Information reported earlier in July.
Tuesday morning, McAdam said that Oath wasn’t going anywhere, and that the company is happy with its integration so far.
“We see the synergies that we expected to see, and we see the future that we had hoped for,” McAdam said. “[CFO Matt Ellis] talked about in his remarks the integration efforts that are going on. They are on schedule.”
Perhaps the recent shuttering of Verizon’s mobile video service go90 will clear the way for increased investment in Oath. Verizon invested more than $200 million in the platform before announcing in June that it would cease to exist.
Sources had previously told Business Insider that go90 had been getting the majority of the recent content investment, but that that could change with go90 gone.
The company announced a big charge related to go90’s closure on Tuesday noting “a pre-tax charge for product realignment of $658 million, mainly related to the discontinuation of Verizon’s go90 platform and associated content, severance charges of $339 million, and acquisition and integration-related charges of $120 million, primarily pertaining to Oath.”
Verizon beat profit estimates on Tuesday, with net income of $4.12 billion, or $1 per share.