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88 STREAMING MEDIA INDUSTRY SOURCEBOOK 2018
impairment and write down the carrying value of
Ooyala, its US-based intelligent video business, to zero.”
10. AOL-Time Warner
This one is a cautionary tale, studied in a number of
MBA courses on what not to do in an acquisition. But
at the time it occurred, the thinking was that new media was going to swallow old media. American Online
(AOL) represented new media, and Time-Warner (
itself a merger in 1990 of magazine company Time Inc.
and media company Warner Communications) represented old media.
The acquisition by AOL in 2001 even spawned a new
name, AOL Time Warner, with AOL shareholders
holding 55% of the company to Time Warner’s 45%
stake. This was due to AOL’s outsized market capitalization as a new media darling. The sale price was
$164 billion, the largest acquisition at the time.
Unfortunately, the AOL division stumbled, the company reported a $99 billion loss, and the valuation
of the combined company plummeted from approximately $226 billion to around $20 billion. By 2003, the
AOL name was jettisoned and the company became
Time Warner, Inc.
In 2016, AT&T announced its plans to acquire Time
Warner, Inc. for approximately $109 billion (including
assumption of Time Warner’s debt), but the deal has
yet to reach completion, complicated by the fact that
the U.S. Justice Department stated in November 2017
that it opposes the deal.
11. Verizon-Yahoo
Two other media and infrastructure giants also
combined forces recently, with the traditional infrastructure company, Verizon, acquiring the once lofty
new media company, Yahoo.
Yahoo had attempted multiple pivots and restarts,
as it saw its valuation drop from a high of $110 billion
to down into the single-digit billions, with the company even choosing in 2009 to join with search and advertising rival Microsoft in an effort to unite behind
Bing to stave off Google’s rapid ascent to online search
and advertising leader.
The misstep with Microsoft was front and center with
former Googler Marissa Mayer joined Yahoo as its new
CEO, and under Mayer’s leadership, the company began shifting away from Microsoft and toward partnering with Google, even going so far as to ask the courts to
allow Yahoo to renegotiate and end its Microsoft deal.
A 2013 federal court ruling went against Yahoo with
a U.S. District judge ruling that the company needed to proceed forward with its transition to the Bing
search and advertising platform in select Asian markets, including Hong Kong and Taiwan.
Verizon Communications stepped in with an offer to
buy Yahoo’s assets in 2016. In the middle of negotia-
tions, tentatively valued at roughly $4.8 billion, Yahoo
revealed that it had suffered two major cyberattacks
that exposed over a billion of its Yahoo Mail custom-
ers’ user names and passwords. At that point, Verizon
asked for a discount of almost $1 billion, but finally
closed the deal in June 2017 to acquire Yahoo’s assets
for $4.48 billion.
The new name for the Yahoo-Verizon assets merged
into a new Verizon subsidiary? Oath.
And to make maters worse, in November 2017,
Oath announced it was laying off approximately 500
employees from its AOL division. We can’t make this
stuff up.
NINE MORE NOTABLE M&A ACTIVITIES
If you’ve made it this far, you’ve already read almost
4,000 words on the top 10 mergers and acquisitions over
the past 2 decades of Streaming Media.
For brevity’s sake, we’ll close out the article with
a brief highlight of one more acquisition, one that
may pay dividends in the near term as the industry
grapples with the AV1-HEVC debate and looks for
additional gains by moving towards perceptual quality encoding solutions.
First, the rest of the best, in alphabetical order by
acquirer or key investor:
12. AT&T’s acquisition of Quickplay Media
13. Beamr’s acquisition of Vanguard Video
14. BSkyB’s investment in Roku
15. CenturyLink’s acquisition of Level 3
16. Cisco’s acquisition of Inlet Technologies
17. Comcast’s acquisition of thePlatform
18. Google’s acquisition of Anvato
19. Telestream’s acquisition of Anystream
20. Verizon Digital Media Services’ formation,
after Verizon acquired EdgeCast and Uplynk
Which one do we see as most interesting going forward? The Beamr-Vanguard tie-up caught my attention during an interview with Beamr’s CTO, Dror Gill,
at the 2017 Streaming Media West show. I had the opportunity to ask about the company’s pivot from visual optimization to a pure codec company. It was clear
that Beamr is potentially picking up the On2 mantle,
that of an innovator willing to dive deep into research
and development at the core codec level.
Tim Siglin is a streaming industry veteran and longtime contributing
editor to Streaming Media magazine.
Comments? Email us at letters@streamingmedia.com, or check the
masthead for other ways to contact us.
