Marni Walden says it's all about increasing the size of Verizon's audience

Do you Yahoo? Apparently Verizon does. The company surprised the world earlier this summer by striking a deal to buy Yahoo for about $5 billion.

The Wall Street Journal's Jason Anders spoke with the woman behind that deal, Verizon's president of product innovation and new businesses, Marni Walden. Here are edited excerpts of the conversation.

Still on target?

MR. ANDERS: In September Yahoo said that it appeared that it was the victim of a very large, state-sponsored hack, more than 500 million user accounts accessed. This may well turn out to be the largest hack of its kind ever.

So where does that leave this deal? Are you renegotiating?

MS. WALDEN: The first question is, does this deal strategically still make sense to us. And the answer to that is it absolutely does. The reason we wanted to get this asset is we wanted to increase the audience scale that we have at AOL [which Verizon purchased last year]. So it very much makes sense.

What we have to be careful about is what we don't know. I've got an obligation to make sure that we protect our shareholders and our investors, so we're not going to jump off a cliff blindly. But strategically the deal still makes a lot of sense to us.

Yahoo is conducting their investigation. There's lots of information that Verizon still needs. They'll give us that. We're hoping that in the next 60 days or less that we can have an outcome.

But right now they are conducting the investigation and will be providing us information.

MR. ANDERS: What exactly will I as a consumer see differently if and when Yahoo comes into the fold?

MS. WALDEN: Maybe if I can start back in time a little bit, about how we got to AOL. Ultimately Verizon had a number of assets that needed ad-tech capabilities to monetize those assets.

We had the oil in the ground. We didn't have the rigs to pull it out.

We then looked at a number of ways to get to that, and AOL made a lot of sense, so we did that deal. But if you look at where AOL is in terms of audience, even with adding Verizon to it, we're still 200, 300 million eyeballs.

Too small to really be meaningful in that space. You compare it to others in the space, they're in the billions. Yahoo brings a billion-plus eyeballs or audience to the platform. We thought, clearly, there's synergies in the deal. It makes sense to put them together.

How we think about it is that there are a number of brands. To simplify it, if you think about a shopping mall, the name of the company right now is called MediaCo. That's what we refer to when we look at all of the assets underneath that.

But ultimately inside of that shopping mall are a number of stores. And that's Yahoo Mail, AOL Mail, Tech Crunch, Huffington Post, Yahoo Finance, Yahoo Sports. And each one of those storefronts gathers eyeballs, and we think we can continue to add content and assets that Verizon has to each one of those storefronts. So you bring audience to that platform, and then you can monetize it through advertising.

Head to head

MR. ANDERS: Do you think that the Yahoo brand remains someplace that advertisers are willing to be closely associated with?

MS. WALDEN: Yes, I think they do. They still are today. Yahoo Finance, Yahoo Mail, Yahoo Sports still has significant traffic on it. And those brands will continueto live in that storefront, as I talked about.

MR. ANDERS: Talk about the content side. You talked about maybe reimagining sports. What else are you looking to do on that front in terms of serving up different types of content that we don't have right now?

MS. WALDEN: We have been very much focused on millennial and younger, because that's where the market is moving. We've invested in content, AwesomenessTV, Complex Networks.

Complex [a network of websites] has a huge following with male audience 18 to 24. And then AwesomenessTV [a multichannel network], similar with young women, 13 to 24.

This is a new kind of format, and it's a mobile-first kind of format. It's a very different strategy than going after a market that's more traditional and more aligned with a pay-TV model.

Write to reports@wsj.com

(END) Dow Jones Newswires

October 31, 2016 02:48 ET (06:48 GMT)

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