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Verizon's Q3 revenue missed analysts' expectations, dropping 6.7% year-over-year (YoY), the company announced on Thursday.
Much of Verizon's discussion of the quarter focused on efforts to increase its advertising capabilities through AOL and Yahoo and beef up its media output through its Go90 platform and newly formed Complex Networks.
The earnings report comes at the heels of Yahoo’s massive data breach, which affected over 500 million users. While the full repercussions are still unknown, Verizon noted that they would be closely monitoring the situation.
Verizon continues to integrate Yahoo and AOL to enhance its growing advertising business. Combining AOL’s advertising technology with Yahoo’s successful BrightRoll division — one of the industry’s leading programmatic video properties — should create a strong digital platform with a deep data set to help advertisers reach their target audiences. AOL revenue grew to $486 million in Q3, up 10% YoY, driven by its programmatic platforms. Verizon noted that it has seen strong demand from advertisers due to an increase of high quality data analytic tools.
Verizon emphasized its increased assets to distribute, create, and publish video content. Here are the key points it touched on:The health of Go90. While Verizon doesn’t breakout subscriber numbers, Go90 – the company's online video-streaming service – generates an average daily usage of over 30 minutes per user, according to the earnings release. Verizon CFO Fran Shammo also noted the platform continues to see strong demand since its launch in September 2015. Launching new programs on this service will be paramount for future growth and new sign-ups. The launch of millennial-focused Complex networks. In September, Verizon and Hearst officially debuted Complex Networks, an initiative focused on digital video programming for a younger, mobile-first audience. The network generates more than 500 million video views per month and showcase a combined social following of 75 million users, according to Hearst. Complex Networks will also be available on Go90, which would further increase user engagement and growth on the platform.
However, FiOS video subscriptions were unimpressive. The company added an additional 36,000 FiOS video subscribers in Q3, well short of analyst estimates of 59,000, as more consumers rely solely on high-speed internet for their entertainment needs. FiOS internet added 90,000 net subscribers from the previous quarter.
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