On the Line: Verizon CEO Ivan Seidenberg
Web Editor, "Mad Money"
Verizon Communications’ Ivan Seidenberg will admit he has a tendency to underestimate the impact of a new technology. The CEO never would have guessed that his company would handle 25 billion text messages in a month even a few years ago.
With the growth of the internet, data and wireless, “it’s a spectacular adjustment that we’ve had to make to make sure we stay up with consumer demand,” Seidenberg said.
But Verizon’s triple-play (phone, cable and internet) service FiOS seems to be closing the gap between company and clientele. As Cramer pointed out, FiOS is picking away at rivals in cable, and still only half of Verizon’s network has been penetrated. This and a new fourth-generation cell phone technology provides “a huge growth story for this stodgy old company,” Cramer said.
Mobile video has yet to reach full saturation, too. So Seidenberg’s betting news and sports highlights, movie trailers and maybe even Mad Money clips will be viewed constantly by people on the go in the near future. “I think video’s going to be a big deal,” he said.
But don’t expect Verizon to get into the content business. According to Seidenberg, there are enough smart people in Hollywood and Silicon Valley that can handle that. For now, he said, “what we want to do is carry it and package it and get it to the customer as quickly as we could.”
Instead Verizon will focus on returning value to shareholders. And that’s another reason Cramer likes the stock so much: the 3.9% yield. The company plans to keep on increasing the dividend, too – no matter how much it costs to bring FiOS to Boston, Philadelphia and New York, Seidenberg said – provided margins increase the way they did in 2007.
So what’s next? The quadruple play. The goal is to give Verizon customers the ability to access any information from any platform no matter where they are. That, Seidenberg said, “will keep our cable friends running pretty quickly.”
“Nothing that’s going wrong now should be able to touch this company,” Cramer said, referring to the troubles in the market. “They’re changing the game in wireless.”
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