Verizon aspired to become a media firm, and it was more than willing to spend a large amount of sum to make it happen. With the younger video viewers frequently flocking to YouTube and social media platforms instead of linear TV, the time was ready for a new video platform competitor, especially one that would be able to offer great content from the media companies and digital video creators that young people were already spending time with on the screens of the mobile devices.
However, Verizon said that the failed venture of the telco firm into mobile video streaming cost the firm approximately $658 million (£500 million).
Despite its release of better than expected earnings, the firm revealed that its results had been affected by the charges for product realignment that related to the discontinuation of the company’s go90 platform. The said platform was closed last June less than three years after its introduction to the public.
The founder of media advisory firm Creatv Media, Peter Csathy, stated: “Go90 never really had a chance.”
He added: “The industry never really understood its strategy. But, they happily took their money, with most reporting that Go90 overpaid for their content.”
A total of $339 million severance charges, as well as integration and acquisition charges amounting to $120 million that was due to its deal for Oath also swayed takings.
The revenue of the company rose by 5.5 percent to $22.4 billion, however, the profits for the second quarter fell by five percent as compared to the same period during the previous year.
Despite the drop in profit, the company retained its targets and said that its full-year results could beat expectations.
Lowell McAdam, the chairman and chief executive of the company stated: “Verizon is extremely well-positioned for the future.”
He added: “Our financial and operating results for the first half of 2018 were strong, as evidenced by service revenue, earnings and operating cash flow growth delivered in a highly competitive marketplace.”