A plan by AOL boss Tim Armstrong and Verizon President of Product Innovations Marni Walden to build a digital ad empire for Verizon using the company’s new $4.8 billion acquisition of Yahoo has been greeted with a growing chorus of skepticism, according to a report by The New York Post.
“Armstrong aims to combine AOL’s ad technology and content with Yahoo’s to create a digital media and ad powerhouse to rival that of Google and Facebook. The expectation is that he will also cut jobs and other costs to save money,” the story reports.
“But combining two flailing Web companies is never easy and is even harder when the Google-Facebook duopoly is sucking up the majority of digital ad dollars,” The Post reports. “The strategy has opened a rift within Verizon between the new media and legacy phone camps, according to sources.”
The report quotes a source saying: “There’s no question there’s a lot of tension between the people trying to re-create Verizon as a media company and the people who pay the bills.”
The plan is to fold Yahoo into AOL, with Armstrong to oversee the operation. The acquisition, which is expected to close early next year, is part of what one source described as a “grab bag” of acquisitions for Verizon.
“This year Verizon and Hearst formed a joint venture to invest in Awesomeness TV, the Dreamworks Animation-run video service that targets young women,” The Post reports. “They also acquired Complex Media, the male-skewing pop culture destination that rivals Vice. Financial terms weren’t disclosed.”