Verizon Won't Buy "Big Network Company," Yahoo Deal Would Boost Scale, CEO Says
A coy Lowell McAdam didn't share more details of the Yahoo auction at an investor conference.
Verizon Communications CEO Lowell McAdam was cautious Tuesday with comments about the bidding process for Yahoo, but did signal continued interest in the struggling web portal.
"We can't talk about Yahoo. But that's a possibility to gain greater scale," McAdam told analysts while talking about Verizon's mobile-first video strategy at the 44th J.P. Morgan Technology, Media and Telecom conference in Boston.
The telecom giant is understood to have made a bid for Yahoo's core operations, which would help boost the company's online reach after its acquisition of AOL for $4.4 billion. It would help the phone giant drive video content to its expanding digital platforms, including AOL.com and the Go90 service.
McAdam on Tuesday also stressed that Verizon was moving slowly and nimbly into the content space. "I know your question is, 'Are we going to go and buy a big network company?' " he said at one point, before the conference moderator added he wasn't allowed to ask that question.
He still got an answer. "We're not doing that. I don't think we need to do that," McAdam said.
Verizon submitted an initial bid for Yahoo as millennials increasingly become a core focus for the company. "If you believe that mobile is going to be the viewing choice for the millennials as they go through the Internet and video, then having those platforms that would help drive traffic on the network are critical," McAdam told investors.
Next-round bids for Yahoo are believed to be due in early June.
The phone giant also recently acquired a stake in AwesomenessTV and partnered with Hearst to jointly acquire male-focused media company Complex. While not directly answering questions about the Yahoo bidding, McAdam did tell Hollywood a lot about what Verizon, seen as a frontrunner in the Yahoo hunt, will do on the video streaming side if it doesn't acquire the web portal's core business.
"Video has been a major strategic move for us," he said at the J.P. Morgan conference. That drive has come mostly through its free, ad-supported Go90 service. "Far and away, the largest driver of traffic on a mobile network is video, at this point. And we're seeing it grow 50 percent, year-over-year," McAdam explained.
Verizon is partnering with Hollywood players like Hearst, DreamWorks and AwesomenessTV, and buying content from the NFL and the NBA, to drive premium video to Go90 and its other digital platforms. The strategy is to target young people who use the smartphone and the tablet as their main video-viewing platforms.