Verizon Communications (NYSE:VZ) can get a stronger position in the market in digital advertising by Yahoo deal. Verizon could also raise its revenue and traffic by distributing some phones with Yahoo apps already installed. Verizon can also use yahoo finance and yahoo sports, its highly traded features, to make money. So company is also capable of doing what Yahoo could do on its own.
But the big challenge on the way of success of Verizon Communications (VZ) is getting better ad rates where Facebook and Google are big rivals. Google and Facebook had already occupied 55 percent of the U.S. digital-ad market last year, whereas a both Verizon and Yahoo would have had just 6 percent, according to eMarketer data.
MoffettNathanson analyst Craig Moffett said. “They’re third place in a two-player market. Ad dollars are going to Google and Facebook and they’re coming out of everyone else.”
Verizon Communications need a detailed research about its target market whereas Google and Facebook already have large amount of data. Verizon wants to be more than Like many other major broadband providers, Verizon is trying to be more than a “dumb pipe” like other broad band services.
The company has invested in mobile video and digital-ad business to build a business that can generate money when people spend time on their phone.
Verizon Communications (NYSE:VZ) got technology to matches the ads with websites like TechCrunch and Huffington Post with its $4.4 billion acquisition of AOL, last year. The agreement of buying Yahoo will give Verizon websites, apps and other services which more than a billion people use around the world each month.
To sell ads and make more money Verizon can use AOL’s ad technology on computer or phone. So this ad-sales technology may encourage brands to invest money. Forrester analyst Dan Bieler said “Verizon and AOL will be better than Yahoo was at using Yahoo’s user data and wide range of apps and media properties to sell ads.”
With the help of Yahoo apps on Android phones Verizon Communications (NYSE:VZ) can get more traffic. However, Apple Inc is not allowing this on iPhones.