Verizon Communications (VZ) at Bank of America Merril Lynch 2016 Notes

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VZ’s plan for AOL and Yahoo is to create a consumer brand company, in contrast to Facebook and Google’s emphasis on social

Yes, I would say just again super high level is, there is two strategies that it won’t work. One is basically anything, but Google and Facebook strategy overall. And the second one is copying Facebook and Google. So, I think, we were successful at AOL, because we chose a very clear gap in the market, where there was opportunity and we invested against it. I believe there’s a gap in the market that’s bigger than we’ve got AOL. And I – with Google search and Facebook is social, I think, we will be the brand company that essentially builds brands, builds consumer brands, but also on the B2B side helps other people build their brands. And the gap in the marketplace are the following two places. Tim Armstrong – Chief Executive Officer, AOL

 

VZ is going to become a brand company by providing a different set of tools, data, and metrics

We’re coming to them with a different set of metrics, different set of data, and different set of targeting criteria around content. And that allows us to have a differentiated place in the marketplace. And then number two is, in a lot of cases, where search and social have gotten tremendous traction, and they’ve done a very good job with that overall.

A lot of the dollars that have lagged behind or in this brand space and that’s where we’re working on a number of things, I think, are super innovative that will be done at the end of this year and into 2017, that will allow us to kind of push new types of metrics and opportunities to those customers overall. So, I – the easiest way to think about us is, if there’s search and social we’re branded. Tim Armstrong – Chief Executive Officer, AOL

 

There is a $90 billion new market coming over the next four to fives years in mobile and mobile video as 3.5 billion more consumers connect

You have a near-term opportunity over the next four to five years of about $90 billion of new market opportunity, just in mobile and mobile video alone. So, if you woke up today and said, hey, the size of this total pie there’s going to be 3.5 billion more consumers that could connect to this network, so there will be 7 billion people connected by the early 2020s. There’s a 90 billion near-term opportunity. Tim Armstrong – Chief Executive Officer, AOL

 

Google and Facebook dominate their market, but there is a clear market space for helping consumers find new customers

“where we come in as we help customers find new customers overall, and we help people measure, how do you find new customers. And that’s a very, very important, I’d say, strategic different lens into the ad marketplace than Facebook and Google are doing.

Again, Facebook and Google are way above us. They’re executing very well. But for the areas that we’re focused on, we think there’s a clear market opportunity for us in the ad technology and marketing space.” Tim Armstrong – Chief Executive Officer, AOL

 

Over a million people watched the Super Bowl on mobile

“But people said, hey, people won’t watch the Super Bowl on their mobile device. the reality is over 1 million people did watch the Super Bowl on their mobile device and it wasn’t everybody gathering around a big screen in a bar or somebody’s house.” Tim Armstrong – Chief Executive Officer, AOL

 

VZ has invested substantially in sports, because sports draw consumers in scale and consistency like a religion

“You look at what the investments that have gone into Yahoo Sports and Verizon put into sports overall through the digital properties. Sports is one of those things that is in a key part of people’s time, many times it’s on the weekend… You’ll see normal human beings during the week put on different clothing and go to a soccer match or a football match for those things. And the same – it’s almost a religion overall… if you went out all the middle schools or high schools in the country and you asked all of the middle schoolers or high schoolers to name every single player on the New England Patriots or name every single player on Manchester United, you would have a 90% percent hit rate” Tim Armstrong – Chief Executive Officer, AOL