Verizon’s media business Oath—comprising the combined businesses of AOL and Yahoo!—is bracing for some more bad news, this time in the form of a massive write-down.
Verizon revealed in an SEC filing today that Oath is expecting to record a non-cash goodwill impairment charge of approximately $4.6 billion during the fourth quarter. The company arrived at that figure after new Verizon CEO Hans Vestberg and new Oath CEO Guru Gowrappan hammered out a new five-year strategic planning review of Oath’s business prospects. The resulting revised projections for Oath were applied in determining the impairment charge.
Verizon said that Oath has experienced increased competitive and market pressures throughout 2018 that have resulted in lower than expected revenues and earnings.
“These pressures are expected to continue and have resulted in a loss of market positioning to our competitors in the digital advertising business,” the company wrote. “Oath has also achieved lower than expected benefits from the integration of the Yahoo Inc. and AOL Inc. businesses.”
Wells Fargo analyst Jennifer Fritzsche said that the write-down for Oath is in line with Verizon’s focus on its network and less on its media business.
