Verizon just admitted that the value of its media brand, Oath, is essentially worthless.
Verizon announced Tuesday that it would take a $4.6 billion writedown on its the media unit, which includes Yahoo and AOL.
Oath's brand value is now worth just $200 million, according to Verizon. That's a stunning decrease in value since it formed in 2017. Verizon said Oath's brand was worth $4.8 billion when it last accounted for the company's goodwill valuation.
With virtually no goodwill brand value, Oath's overall value (assets and goodwill) is now worth half of what it was a few years ago.
The telecommunications giant said the integration of Yahoo and AOL didn't meet expectations.
Oath "has experienced increased competitive and market pressures throughout 2018 that have resulted in lower than expected revenues and earnings," according to a filing with the SEC Tuesday. Facebook, Google and Amazon are sucking up ad dollars, forcing publishers to search for other streams for revenue.
The Verizon media unit's poor performance led the company to make "unfavorable adjustments to Oath's financial projections" for the next five years.
Verizon plans to focus more on wireless technology and less on content and distribution.
This summer, Verizon replaced CEO Lowell McAdam with Hans Vestberg, the telecom company's former chief technology officer.
In September, Oath CEO Tim Armstrong left.He was a driving force behind Verizon's media acquisitions. Armstrong was replaced by K. Guru Gowrappan, Oath's president and former chief operating officer.
Verizon announced Monday that 10,400 management employees had accepted voluntary buyout deals, out of 44,000 who were eligible. The buyouts are part of a plan to cut costs and shift investments into wireless and 5G.