VZ Sells Yahol, Amazon Liability, No Herd Immunity

VZ Sells Yahol, Amazon Liability, No Herd Immunity

Yahoo's Death By 1000 Cuts Continues with PE Sale

Verizon is selling its media and ad-tech assets, AOL and Yahoo, to Apollo Global Management for $5 billion. The company paid nearly $9 billion for the two companies in separate transactions. The press release is all smiles: "The corporate carveout will allow Verizon Media to aggressively pursue growth areas and stands to benefit its employees, advertisers, publishing partners and nearly 900 million monthly active users worldwide." Verizon receives $4.25 billion in cash and a 10% stake in Verizon Media. The surviving brand post-transaction will be Yahoo. But let's fondly reflect on one of the worst branding mistakes in recent memory: Oath (the original Verizon Media business unit name).

Our take:

  • Verizon Media made several recent announcements about new partnerships, business models and innovations – suggesting momentum.
  • The deal is an admission of VZ's failure. There's no reason that Apollo will fare any better, though it's probably looking to IPO ultimately.
  • It has been painful to watch the slow-motion decline of Yahoo, starting with its ill-fated search deal with Microsoft in 2009.

What Amazon Strict Liability Case May Mean for Others

Amazon was recently found strictly liable for a defective Chinese product under California law. The California Court of Appeal, in Bolger v. Amazon.com, LLC, held that Amazon was "strictly liable" for a defective third-party product it didn't make or fulfill, but was merely sold on its website. The court also found that Amazon was not shielded by the Communications Decency Act (CDA). Amazon has appealed to the California Supreme Court and could appeal to the US Supreme Court beyond that. If the decision holds, the implications are quite significant for e-commerce marketplaces (e.g., eBay, Etsy) and potentially for internet publishers and platforms (e.g., Facebook).

Our take:

  • Though in CA, if the case sticks, online marketplaces would become liable for defective products, fraud and other problems. Enter lawsuits.
  • I'm making a leap: the fact the CDA didn't apply here (specific circumstances) potentially erodes it as a liability shield in other contexts.
  • Separately, section 230 reform is definitely coming, which will impose further duties, burdens and liability on publishers.

Herd Immunity Out of Reach: What Does That Mean?

Given that a substantial percentage of the US population (25%) won't take the vaccine, out of fear or ideological defiance, the US won't reach herd immunity. Get used to it and the social and economic consequences (for better and worse). It means variants will keep emerging and that the COVID vaccine ritual will be an annual event. Life will never fully return to "the way it was before." However people are trying, indicated by an increase in air travel, store visitation growth and the return to restaurants (graphic below). Yet consumer behavior patterns will forever be changed, the full extent remains to be seen. There are many more implications for us to debate later.

Source: OpenTable (May 2021)

Our take:

  • Traditional retail disruption will continue as commodities and a big chunk of apparel shopping go online – nearing 30% of retail by 2023.
  • No business can operate as before; digital is now the center of everything. Service businesses will have to do much more online.
  • The post-COVID market will be more concentrated with fewer, bigger winners (see last week's boffo earnings). Smaller SMBs will suffer.

Recent Analysis

Short Takes

  • Travel search site Kayak's first hotel in Miami Beach is now open.
  • Macy's employees win commission ruling over in-app self-checkout.
  • New pockets of innovation: Maybe local news isn't dead after all.
  • SEO: Thin-content service area pages don't rank.
  • The rise of "local justifications" in SERPs.
  • Online percentage of larger SMBs' revenue jumps to 57%.
  • MasterCard tries to be a channel for SaaS, SMB marketing companies.
  • Global e-commerce grows nearly $1 trillion to $4.2 trillion in 2020.
  • "Live commerce" set for big growth in 2021, as COVID lingers.
  • Clubhouse: unlikely free speech beacon in authoritarian countries.
  • Baidu self-driving Taxi service now live in Beijing.

Please let us know what you think. Email gsterling@nearmedia.co with suggestions and recommendations.