Verizon Staying Focused

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With AT&T trying to add Time-Warner to Direct TV in its entertainment stable, it probably isn’t surprising that rumors started floating about the possibility of Verizon trying to snare a media giant of its own. However, Verizon was very clear in putting a damper on those rumors.

While vertical mergers with entertainment companies could be seen as quite a logical method of diversifying and growing a telecom’s revenue stream, Verizon is concentrating on other income models. Though the company has ventured into widely divergent areas, it has exhibited laser-like focus on the industries it chooses.

Telematics, for instance, might have seemed like a surprising route for Verizon to explore. And yet, the company has been enormously successful, already at the forefront of an industry that is just getting ready to explode into even further profitability than it has seen thus far.

Still, Verizon’s purchase of AOL has never been accorded much respect, though it increased a full 10% in the year’s third quarter. The Yahoo! deal wasn’t really met with much enthusiasm either, though Verizon is using every piece of leverage it can muster to drive down the price.

The fact is, Verizon is betting on advertising and content distribution for revenue, rather than content creation like AT&T. And that doesn’t seem like such a bad idea, as both of those things rely much less on the public’s fickle taste in entertainment.

Additionally, Verizon is investing heavily into fiber assets and everything it will need to stay ahead in 5G technology and infrastructure. There doesn’t seem to be any doubt where the company’s priorities lie.

Analysts and investors seem unimpressed, which is probably why Verizon’s share price has dipped a bit since last week. Time will tell whether they are right or not, but Verizon doesn’t seem to be bothered by the comparisons to AT&T. The company remains focused on its game plans…which do seem to be working.

 

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