On the heels of Verizon’s $4.8 billion deal to acquire Yahoo, the telecom company emphasized during an earnings call today that it wants to create a mobile video giant to compete with Google and Facebook.
With many of its legacy network businesses slowing or declining, Verizon has been in search of other ways to restart revenue growth. The company reported second quarter earnings that fell short of analysts’ estimates and has been describing 2016 as a “transitional year” for the company.
The bets on the future include investing in blazing-fast 5G mobile networks, Internet of Things, and media and content, the latter including its acquisition of AOL last year for $4.4 billion.
While the Yahoo acquisition will come with many different types of content and products, Verizon’s chairman and CEO Lowell McAdam repeatedly emphasized during a conference call today that it was the company’s mobile video products that has him most excited. While Facebook and Google’s YouTube are the giants in this realm, McAdam is convinced the company can be a robust third.
“Content creators and advertisers are hungry for more alternatives,” McAdam said. “Verizon intends to be a significant player in this space.”
McAdam said the decision to move in this direction reflects the dramatic shift in the way “younger customers access their video content.” He said Verizon has learned a lot about this dynamic thanks to its purchase of AOL and other content partnerships.
In focusing on mobile video from Yahoo, McAdam was giving a rather large compliment to Yahoo CEO Marissa Mayer, who had made a focus on video part of her ill-fated turnaround campaign. This was part of the so-called MaVeNS (mobile, video, native advertising, and social) initiative.
Still, McAdam was also somewhat realistic and did his best to set the bar low. He acknowledged that the two leaders were way out in front and that Verizon would have a lot of work ahead.
“Are we going to challenge Facebook and Google?” he said. “The market is going to grow dramatically. If we take more than our fair share of this growth, then this will be a great success for us.”