With politics, world events taking center stage, earnings news from tech giants seems rather trivial
Morning Brief: Shift in revenue line reveals larger costs for Yahoo for audience acquisition, meaning Verizon may not be getting the size audience it thinks it is getting
After the bell today both Apple and Twitter will be reporting earnings. This would be a big deal, under normal circumstances, but with the Democratic convention this week, and the Republicans last week, it is hard to get people’s attention on things outside of politics and world events.
And no wonder, just think of the stories that have broken in the past day or so:
- The chair of the DNC is booed and heckled at the convention she was tasked to open, eventually forced to say she will resign following the convention, but will be absent throughout it, as well.
- Vermont Sen. Bernie Sanders is booed and heckled by many of the same people, his own supporters, for the crime of admitting the obvious, he won’t be the nominee of the party and his supporters should eventually support the person the convention selects, as if that is somehow not a normal and expected request.
- The FBI is investigating whether the DNC hack was state sponsored, an act of espionage conducted on behalf of the Russian government, designed to swing the election to the Republicans, something die-hard cold warriors like Ronald Reagan would have found unbelievable.
- In a world of continued, often senseless violence, a man in Japan killed 19 people with a knife in an attack at a facility for disabled people, saying “I want Japan to be a country where the disabled can be euthanized.” In France, yet another ISIS inspired attack led to a 84-year-old priest being killed inside his church.
Somehow, I really don’t care about Apple’s earnings, or even Twitter’s for that matter. Neither company seems to be dealing well with the issues that are right in front of them: Apple’s shift from an innovated, consumer electronics company into the General Motors of tech; Twitter’s stubborn resistance to allowing its loyal users to have better screening and editing functions so as to block trolls and hate promoters, while making their service a better and more responsible social network.
Tribune Publishing, now called tronc, rushed out emergency app updates for its newspaper digital edition apps after some users reported that the apps would crash at open. The update for newspaper apps such as LA Times also has made an adjustment so that the app uses less storage for its editions.
tronc just this morning announced a date for its Q2 earnings announcement: after the bell on Wednesday, August 3. It recently moved from the NYSE, when it was known by the more traditional name Tribune Publishing, to the NASDAQ where it adopted its current absurd name.
It is interesting to me that one thing not getting much attention in the Verizon acquisition of Yahoo is how much Yahoo spends on audience acquisition.
Instead, most financial and tech reporters simply repeat the line that Yahoo’s audience is huge and that the acquisition is designed to build out Verizon’s own audience so that it can be an even bigger player in the mobile ad space.
That certainly is the motivation behind the $4.83 billion deal.
But I wonder if Verizon is really getting all it thinks it is. When you look at the P&L you see that with this year Yahoo now reports some of its audience acquisition costs as a true cost rather than a reduction in revenue. This is why the company was able to report a rise in revenue, it shifted it costs to the other part of the ledger.
I think the Verizon acquisition makes sense, especially knowing that it is really about building out AOL. But I think a few years from now we’ll look back and see it as not such a big deal, just one of many made by Verizon in its effort to build out its mobile ad business, and probably not even on of its more important deals.
Audience acquisition costs is something few publishers are eager to talk about. But even the largest publishers find themselves supplementing their audience by placing ads it has sold onto third party sites. The reason they need to do this is not that their own audiences are small or not valuable, but because digital ad order demand such ridiculous gross audiences, and ridiculously low costs.
As a result, in order to fulfill these orders publishers work with a variety of partners to reach the numbers required by the sale.
This is yet another reason a few of the major magazine publishers are making acquisitions of small, sometimes well known, sometimes less well known, digital media properties.
The French are right, people should take August off.