AOL CEO Tim Armstrong will lead OATH. Image: Vanity Fair.

On April 4, Business Insider reported Verizon Communications Inc. would merge with both AOL and Yahoo’s core businesses under a new umbrella company called Oath.

AOL CEO Tim Armstrong confirmed the name of the new conglomerate, saying it would gather over 20 media brands. The rumor says he will be the director of the organization.

The rebranding of the two internet giants comes after the PR catastrophe that was Yahoo’s massive data breach. Not once but twice the former industry leader betrayed consumers’ trust, disclosing the biggest hacking scandal ever with half a billion accounts compromised.

Oath wants a piece of Google and Facebook’s ad business

While details are scarce at the moment, it has been long rumored that the most likely path Oath will take will be to combine AOL’s extensive media presence with Yahoo’s Internet expertise to launch an online ad business similar to Google’s.

AOL’s days in the spotlight are long gone, but its relevance remains as a major media company. It owns tech portals like Engadget and TechCrunch and high-profile publications like The Huffington Post.

Yahoo’s strongest (and now arguably weakest) business is its email service, which somehow still survives with over a billion active users in 2017. The Internet pioneer also owns side-businesses that include web news outlets and other properties.

Verizon, however, has its eye on the profitable market of online ads. Business is booming with the rise of mobile digital platforms, a new space with ever-increasing revenue opportunities.

What about ex-Yahoo CEO Marissa Mayer?

Yahoo CEO, Marissa Mayer.
Yahoo CEO, Marissa Mayer. Image: Makers.

According to sources familiarized with the new company, Marissa Mayer was out of the equation. She had been Yahoo’s CEO for five years when the data breach scandal became public knowledge.

While the investigation was on course, news outlets started criticizing Ms. Mayer for her involvement in questionable business practices during her tenure. Yahoo employees told the authorities Ms. Mayer ordered the hacks to remain secret.

The executive also made the company’s engineering team to develop dedicated software to feed emails to the NSA without users’ consent. All these antics combined cost Yahoo $350 million off the initial $4.8 billion deal with Verizon.

The remnants of Yahoo not acquired by the carrier will be grouped under a new company called Altaba. These assets include 15% of Alibaba’s business and a Japanese division of Yahoo co-owned by SoftBank.

Source: Business Insider